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Over 40 & Just hanging on to the end of the property ladder

Discussion in 'Property Finance' started by Hangingon, 26th Feb, 2016.

  1. Hangingon

    Hangingon New Member

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    hello, I'm glad to have found this forum.

    I have been asking myself how can I still move up the property ladder? If you can help it would be great! I want to move up the property ladder with renovating but with no finance, how can I do that?

    The negative:
    I'm over 45
    I have only part time work, not much about 20 hours a week to survive on
    I have no savings but over 5k in debts
    I have not been able to find more work after trying for over 6 months

    Positive:

    I have a property I live in
    It would have about $50,000 - 80,000 in equity or more
    I have renovation experience and like it

    I moved back into my own place and I would like to renovate it.
    I have no money for that but I do have some paint to get it a spruce up. I can buy some materials over the coming months and improve it as I can afford things.

    What I would like to know is:

    Once it was renovated, would I be able to get finance from the bank from the equity to buy another place?

    By then I would be debt free with a little savings

    Basically I need to know how can I progress as fast as possible with my debts and no income but with my property and my reno skills and experience?
     
  2. Hangingon

    Hangingon New Member

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    Or should I paint it now, sell it for a lower price than if I waited and renovated properly but slowly? If I did sell it now I would have maybe 60 - 80k or a bit more and I could buy a really cheap place for cash way out in the remote areas but make a quick reno and sell it for enough profit to move on to another. This is basically a cash method until I would start showing a regular income and have some savings could apply for finance to move up faster... what about this approach?
     
  3. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Take a step back. :)

    How have you ended up with no savings in your 40s? These are questions your broker will want to know...so will lenders.
     
  4. JacM

    JacM VIC Buyer's Agent Business Member

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    Hi @Hangingon

    What is the current debt on the property? Are you managing to keep up with the repayments, and is the loan a Principal and Interest loan or Interest Only loan? Also the $5k debt you mentioned.... what sort of debt is it? Credit card debt? Other?
     
  5. York

    York Finance Broker Business Member

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    Welcome to the forum.

    Essentially what you're asking is if you can grow a property portfolio with little income and no real prospect in the short term of a solid income. The quick answer based on the limited info you have provided is no. A lender will want to see evidence that you can make repayments. In the current lending environment especially for investors, things have become quite difficult. Income is very important to a lender and without solid income and evidence you can build some savings, getting a loan may prove to be very difficult.
     
  6. Xenia

    Xenia Adelaide Property Manager Business Member

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    You need a strategy other than just getting into massive debt.
    Pay down some of the loan and get some savings so that it can be safer for you.
    also are you able to create another source of income other than relying on someone employing you? If so that would be a good strategy too.
     
  7. dabbler

    dabbler Well-Known Member

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    You need to be able to pay back whatever you may want to borrow, sounds like you will get a no, the recent shows that say banks are just handing money out are lies, they won't look at you without the income, simple as that.
     
  8. Hangingon

    Hangingon New Member

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    some wrong decisions, I can't change the past
    if i was to sell now and paid the mortgage i would expect to have around 80k give or take some before expenses but I would not have to pay much Capitol tax as I have little income. My loan is p & I, it was once interest only. i had one repayment holiday but been paying it off slowly. the 5 k debt is cc debt ...
    i can see that would be the case these days.
    I'm working on selling a product im creating but that will be a few months before it's ready and it won't be easy.

    I'm here to try to work out a stratergy.

    It looks like what I suspected is confirmed, the banks won't want to know me now since I have little income and debt.

    So that brings me back to my other option, if I sold my place soon and used the cash to start again from the bottom, buying a bargain for less than 80k in a cheap area and try to make say 20k and move up slowly like that? I would really like to hear if anyone thinks this will work or not and why?

    The other option is to try to keep hacking away looking for work or income but I have tried that already and it's not easy. I could hang onto my place and in about 3-5 years if I was lucky hope to find a bank who would lend me enough for a small deposit on another place but this could be a long hard road and all hopes are on finding a better job which is doubtful. By then I would be well into my 50's and most of my friends would have retired and living the dream while I would still be just starting a long road of investing.

    There must be an easier faster way I can try, even if it's a gamble?
     
    Last edited: 26th Feb, 2016
  9. wylie

    wylie Moderator Staff Member

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    Where is your current property and its value now? I would not sell and cop the selling costs in order to pay transfer duty to get back in and hope a small reno will help you gain equity. You may struggle just to recoup the selling and buying costs.

    I would be inclined to slowly increase the value of your current house if it is in a decent area.

    Are you single? Could you rent your place as a whole house and rent a small unit for yourself. That could mean your mortgage and costs are tax deductible and you can rent something smaller for less and your landlord pays rates etc.
     
    Xenia likes this.
  10. Xenia

    Xenia Adelaide Property Manager Business Member

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    If your property is in a better area, I would not sell it to purchase cheap property. Are you in SA?
    Fast is not always better.
     
  11. Xenia

    Xenia Adelaide Property Manager Business Member

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    LOL I think we posted the same thing at the same time Wylie
     
    MTR likes this.
  12. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Approaching 50, gambling might not be the best strategy.

    I think it would be an idea to work on your income, save as much as you can to build a financial buffer to weather storms, then look at your options. Nothing wrong with renovating your place but right now, there should be red lights flashing and sirens sounding – it sounds to me like you'd be in a spot of bother if you lost your job.
     
  13. larrylarry

    larrylarry Well-Known Member

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    Find more hours of work or do part time study to add value to your skills. Find ways to pay down the $5k. The above comments are wise words even though it seems you may not be able to start investing yet.
     
  14. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    I like Wylie's suggestion of renting out the house and renting something smaller for yourself. But to me the biggest problem I believe you have is income. Once you have that, the rest should be relatively easy. If you are struggling to find regular employment can you also try airbnbing in your area or Ubering for additional income? And is there a way to make the hours at your current workplace full time?
     
  15. Bran

    Bran Well-Known Member

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    You really can't earn more $?

    Uber? Airtasker? Labouring? Anything??
     
    Hanison likes this.
  16. Heinz57

    Heinz57 Well-Known Member

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    Mystery Shopping is a good side gig for part timers.
     
  17. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    Personally if I was in your situation I would go and get my truck licence (used to cost around $1000 for a weekend assessment course or centrelink may pay part/all if you receive some form of benefit?) and start driving 6 to 7 days per week.

    A mate of mine worked a day job 40 hours p.w. and then truck driving Saturday and Sunday, he made an additional $1000 p.w. from the 2 days work in the truck.

    In NSW you can go straight to HR licence and then after a year upgrade to HC.
     
  18. Angel

    Angel Well-Known Member

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    He is in NSW and I am guessing regional.

    • I would stay living in the current house and get a boarder - extra income. Risk of not getting along
    • Gradually improve the house while you are living in it - zero cgt, you can reno it in your own time without the hassle of working around tenants.
    • Do not sell it as this would have selling costs that you don't need - probably $10K just for the agent fee
    • Try to pay down CC debt.

    It would help us more if you could give us a description of the house (how many bedrooms, size of land etc) and the name of the location and its current value.

    If you are trying to establish a business, the last thing you want is the instability of selling your home. If as you say there is potential to increase your income that way, then keep at it while doing the painting and your regular job.
     
  19. Xenia

    Xenia Adelaide Property Manager Business Member

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    If you are creating another income, give it time. It can take years to get off the ground, there can also be loss of money in the process of learning.

    However can be done, age is not a determine factor to success, in fact being in your fourties can be a benefit - prime earning years of a human being, keep at it and just do it. It's very very possible for you.

    I have never relied on anyone giving me a job, I've never had one in Australia.

    A friend of mine just got a new job, I looked at the salary, it's equivalent to the same amount of sales commissions that can be achieved in a month. It's a 6 week project - marketing campaign or a small subdivision but people are willing to trade 36 hours a week for 52 weeks for the security of it being guaranteed.

    There is more to be made in being an entrepreneur, people hold onto security and never give it a go.

    You don't have security so already in a great position to create. Give it time, it's not a race.
     
  20. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    Good points Xenia. Sometimes I feel trapped in my job of 9 years, its a great job it's highly satisfying and most of the time I love what I do, but incentive based work where hard work = financial reward really appeals to me.
     
    Xenia likes this.