Would buying a 2bedroom Apt in Liverpool be a good idea?

Hi!

There are a few 2 bedroom apartments appearing in Liverpool for around 350k.
I was wondering whether something like that would be a good idea for my situation.
I'm 28M, gf is 25.
We are on around 60k each, though pushing forward in our careers to move up, and making progress.

My goal is to retire as early as possible, and was thinking that I could buy a place for 350k. I have an 80k Deposit ready to go with 10k rainy day fund.

I was thinking that we could buy the apartment, pay it off as quickly as possible. Aim to move up enough in our careers that we are able to move somewhere cheap in Brisbane, or outside of Sydney/Melbourne, then buy a house out there and pay it off using rent from the first property, or sell the first property.

What do you think of places like this:
https://www.realestate.com.au/prope...QvIEoSDQ8wk52TpxKbcgiE0BypxU2v2K2rDYFtxQQk35g

https://www.realestate.com.au/prope...n3HqlldW9gVEkzaGfabAWaVWETIsUjK3wcbRc12kDzsVU

Thank you!

 

I would give liverpool a big miss huge supply of units and many more to be built.

 

he is not expecting a capital gains on that property

 

Yeah, as Hash says.
I just want to have a cheap place to live where I'm putting money into a mortgage.
I am frugal, I could smash out a mortgage and then essentially be able to sell it again and get all the money back or keep it to rent it out, depending on how circumstances pan out.

Is that naieve, or is there merit to that?

 

Possibly naive, tbh. You're making a big assumption that buying and owning that property is better than just renting and saving/investing the difference. It could just as easily be worse.

You really need a proper strategy and property selection in accordance with the strategy at the very least - how exactly are you going to make the money or profit? Have a good think about that. Paying off a mortgage isn't a real strategy.

 

I'm not trying to make a profit. Rather, if the price is low enough, around a 380k loan, that means that, including interest, I am paying the same as I would renting, plus I would have a bit more freedom renting doesn't afford.

Is that not a good plan? Just asking!

 

But you mentioned n your first post that the plan was to "retire as early as possible". What I'm trying to say is that financially no, it might not be a good plan.

Just because it might cost the same as renting if you have a small enough loan, does not mean its a good idea. What about other outgoings? Or the opportunity cost of the deposit?

Even if it genuinely is cashflow neutral (which is highly unlikely), then what if the value of the property falls?

 

If you want a cheap place to live you cold rent in a cheap place and invest where you believe capital growth will be greatest. Rent vesting.

Personally while Liverpool apartments are cheap, there are many that are a similar product, which limits scarcity and appeal. In order for you to get capital growth it's likely the whole market would need to lift.

 

I think it would be wise to run the numbers on owning the property.

Have you priced in;
~ Body Corporate Fees
~ Rates (water/land)
~ Sinking fund
~ Etc

Hopefully someone else can chime in as I don't own and haven't bought an apartment

Apartment traps for first-home buyers

 

The product is cheap for a reason, there are many more coming.

Also, like @Archaon mentioned there are many additional fees.

However, if you said you were buying a cheap house in Liverpool or surrounding areas for < $500K - and overtime, put in some blood, sweat and tears adding value to it - you could be on to something there.

Here is one example : https://www.realestate.com.au/property-house-nsw-busby-133565274