Wow - what a great thread. I'll put my mark in here, as I consider myself a "young investor". *grin*
Firstly, I'm 26 and my wife is 27. I'm the investor - she's the one who brings me back to reality a lot of the time.
My challenge at the moment is to try and convince my wife to delay kids for a few more years - she's starting to warm to the idea that kids are a good thing (hey, they are, probably), but I'm trying to toe the line of "Let's get ourselves set up first, then go and have kids". The challenge is also working out when that moment will be!
Anyhoo... our situation:
We only have 2 properties at the moment, which is 2 properties more than a lot of people, and a very small portfolio considering some of the giants on this forum, yet 1 property more than my parents (who are in their late 50's and only own their home). Yay!
We started by buying a Brisbane CBD unit off the plan for $336k in 2003. Just wanted to get into the property market with both feet. Signed paperwork March 2003. Got married April 2004. Rented for 8 months. Settled December 2004. Didn't do much due diligence. Probably paid a little too much, considering it was the peak of the boom. Learnt a lot about valuations back then, as the bank valued our property with $0 increase in equity in 19 months. Wanted to kill the real estate agent who sold us our unit... grr. Managed to get a fridge and storage thrown in for free by the developer, so it wasn't all bad.
May 2005 - Bought 850sqm of land at Brookwater, for $225k with a 3 month settlement. Looked at architects; decided that $400k *Just for the house* was too much, so went with a builder/developer. Sourced a builder, did many iterations of the plan that finally went to council in October. I reckon with more experience, we could have done all this within the 3 month settlement period, but since this house is going to be our PPOR, a lot more emotion went into it. Also made lots of small, piddly decisions like lights, carpet, colours, tiles, features, curtains, etc, etc.
I was looking at building from an "adding equity" point of view. My wife was looking at the large backyard for our dog.
Things we did include:
* Submitted plans to the valuer with 'study' renamed to 'bedroom 5'. 5 bedroom house, not a 4+study.
* Got a watertank installed in the huge space under the deck, connected to an outside tap and the two toilets.
The house should be completed in the next 4 weeks or so, and after the landscaping is mostly done (at least the front streetscape), the plan is to get both properties revalued and use a LOC against our home to get our third property, which will probably be a renovation jobby, then renovate and sell or revalue. Wash, rinsh, repeat.
We'll move out of our unit when the house is ready, rent out our storage separately (guess of $120/month), rent out our unit to the building manager for $400/week (1 year lease with rent reviews at the end of each lease), which makes it cashflow positive by about 63 cents/week, not factoring in depreciation.
Whohoo!
My modest guess is by then (July/August 2006), the house should be valued about $650k and our unit about $380k.
That's more than $1mill in property with LVR of about 73%.
Most of my wife's school friends (all about the same age) are renting in Sydney (where we used to live before getting married), and struggling to get a deposit together to buy their first property, yet look aghast when I talk to them about looking for our "third property"... hehe.
The lesson learnt - get off your butt and go do something, anything. If you make a mistake, that's ok. Learn from it.
-- MJ.
