What would you do in my situation? FHO x IP

Hey all,

I would like to hear your opinion about two scenarios:

Current situation:

• My first real state investment.
• Not sure about my borrowing capacity yet but income is around 80k-100k - self-employed through my own company.
• Paying $780 rent.
• I will move out soon (in 6 months) and try to find a good apartment to rent for around $600 - In Sydney still.

Given the situation, I have two alternatives:

• Use the FHO benefits and buy a 2-4 years old apartment (<= 650k in Miranda, Rockdale or Kogarah that is likely to go up in price and I'd like to live in for at least 3 years). And of course take advantage on the low interest rate and stamp duty benefits for a first home owner. Likely that the property will be turned into a IP and I'd buy another one to living in 3 years (or even before).
  • Advantages:
    • Very low cost upfront taking advantages on the FHO grants.
    • No worrying about renting (yields x vacancy rates), management fees and so on as I will be living in there.
    • Maybe it's buyer's time now for apartments as opposite to houses? They might be easier to negotiate.
  • Disadvantages:
    • It's an apartment. (considering that houses in QLD grow up in value way more than apartments in Sydney ?????)

• Buy a house as an investment property somewhere in Queensland. But to do so, I'd need to hire an agent as I don't know the suburbs. Therefore, I'd start with a Buyer's agent cost (13k) + stamp duty + investment interest rate.
  • Advantages:
    • It's a house.
    • I will have some cashflow.
  • Disadvantages:
    • At least 25k cost upfront considering BA and stamp duties.
    • I'll need to find another place to live in anyway - Sydney still.
    • Riskier as I'll deal with tenants.

I would love to hear your opinion,

Thank you all,

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