WHAT WOULD YOU DO IF you had 500K in cash & and 80K per annum salary

Before driving off in your car you need to know the destination.

 

That would not be an unusual yield in Melbourne properties (Typically are low yield so 3.6% yield is not surprising), although the poster has since commented that it was an error in his calcs.

 

Buy one property 280k for cash unconditional with fast settlement or long if required, may get you a 300k plus property. Borrow 200k and use 200k cash to put 400k in share market, perhaps top performing managed fund. That could double your income, and/ or enable you to buy another property in 1 month or 3 years, and secure capital base. You only need to gain 15% on the 400k to pay cash for another 260k property without using other earnings.. Repeat. When the bank stops lending money rent your house out, go and live in Asia to reduce spending s allowing capital to grow faster.

 

Close but no cigar.....

 

easy to make snide comments in hindsight.

Check the cigar in 3 months from now when jobkeeper ends, vaccine roll out has barely started and the true economy position is revealed.

 

I am guessing you are young, under 30? I would put $50k in Super. Then what ever happens retirement won't be too bad. Engineers should have many good years of earning in front of you.
Buy a PPOR no capital gains on that. You can always buy an investment property in the future.

 

You dont know that, could get ran over by a bus tomorrow be an invalid and not be able get a loan.. Take loans while you can because one day you wont be able to or want to. Taking out a loan on the PPOR could get one or two cash flow properties and could be regularly buying into a share portfolio( even super it is just a structure with some disadvantages) and have 4 different assets appreciating and 3 cashflowing. If he wants to retire at 35 retirement might not be that good if funds are inacessable. With compounding every year earlier you start the more massive your gains at the end point, The last year could be more than the first 5 or 10 years gain. I have property that after 30 years has gone up in one year twice what I paid and the shares funded by it go up 100% in a year on what the security cost, as well the rent giving 50% of property cost. Not sure I will ever get around to spending my Super.

 

Any update on this one for us people following at home?

 

I'm 34 and my salary has risen to 175K plus super now. I build roads and its always away from home and attracts FIFO money.

 

Wow, that’s a huge income jump!

 

$50k in super, over 67 life will not be too bad
He will have a home to live in on invalid pension or if lucky compensation payment
Difficult to service loans once you have been hit by a bus

Fast forward a bit income $175k year. Own your own PPOR. I am guessing mortgage broker can get you a far bit.

Advice on here time and time again is pay off PPOR but as always YMMV

I know 2 people "hit by a bus" one got a payout not a lot $450k 25 years ago the other was sued

 

Nothing will happen. If the peak of the coronavirus last year did not dent the property market job keeper aint going to do anything. The ppl actively looking to buy right now are NOT on jobkeeper and they are the ones surging the property market to insane prices we are seeing today. Its going to continue to steam ahead until interest rates begin to rise or APRA or some other government body steps in to control the price jumps.

Once vaccine rolls out and international travel resumes its going to get even worse and prices escalate even more. Property has proven itself as a rock solid investment medium and the best thing about it is that even during times of panic around the world housing and having a roof over your head is ESSENTIAL.

Many new investors and FHBs into property these days. Many ppls perception around property have changed as a result of this virus. Its cemented into them how good and stable it is.

 

I think it might be a bit tough picking up some nice property at this stage, the market is flying and you will be paying overs. PPOR is the way to go though and get into the loan market for an IP and will be sitting pretty. Dont forget the share market is on a bull run as well.

 

Job-keeper is keeping unemployment numbers down, and is keeping money flowing in the economy as well as keeping companies afloat that might not be able to operate without labour charges being paid by the government.

I'm interested and apprehensive to see what will come.

 

+1, while people on JobKeeper aren't the ones buying houses, they are the ones paying rent in IPs. Trickle up is real, and plunging interest rates and loan holidays did wonders to stop it crashing a first time, but let's hope the vaccine works first.

 

I think many ppl are over-estimating who and how many ppl are on jobkeeper. Firstly its mainly hospitality and tourism jobs. Actually its mostly tourism now as all the shops and eateries are fully packed again and most hospitality is back into full swing.

Secondly I was reading a report that there are tonnes of job keeper claims that are quite frankly rorting the system. That is why there is going to be some kind of investigation at a later stage to audit all these companies to ensure their claims were 100% legit.

I dont know a single person on job keeper now. There was a handful of ppl on it during the peak last year that I knew. They are all back to work.

NONE of my tenants have asked me for rental reductions recently. There were several during the peak.

I'd be willing to wager absolutely nothing happens to the housing market when job keeper stops.

 

I would think that the housing market has to change at sometime, it cannot keep going like this.
I agree with most of your post. Also reading that there are a lot of jobs out there now so jobkeeper and any other benefit should cease. I think a lot of benefits will now have to go towards the homeless/really poor because they are on the increase due to not being able to afford to rent. Neither I or my friends had any renters ask for a decrease although now is the time for me to increase rents.

 

Where do your friends live? I have about 5 friends on jobkeeper, but like you said retail, hospitality and other sectors. None of them in blue chip suburbs. I don't know what will happen, just curious to see. I agree rents up back up in blue chips

 

Now you have the serviceability

Cool! Assuming you’ve bought a few properties by now with that income and $500k cash? Interested to see how you broke up the $500k as a deposit.

 

I have not purchased a property due to covid, being away from home a lot for work and not wanting to purchase in NT.
In Adelaide atm on annual leave property hunting and got meeting with financial advisor tomorrow to reduce tax.