Young investors - tell all
- Thread starter wallace
- Start date
young investors
I am 26 years old.
Left high school at 18, brought 1st house at when I had just turned 20.
Worked all the time to buy the house, at one stage had 3 jobs on the go, approx 80 hours working per week, worth it though because I saved quickly.
Lived in the house for 18 months and got some flatmates which was awesome- ended up making great money from doing things like renting out my garage to one of flatmates freinds for his project car etc. We all used to have a great time aswell, partying etc- meanwhile they were helping me pay off my mortgage.
traveled overseas for 3 months and rented my first house out to proper tenants.
brought 2nd house at about 22 , borrowed against the equity in the 1st house and property was cashflow neutral from day 1.
Moved to aussie- (from NZ) in 2007, saved for a deposit and brought PPOR with partner in Dec 2008 in Brisbane.
still have all 3 houses, paper value approx $530k in NZ. approx $485k in Australia. Cashflow positive in NZ. PPOR in aussie by approx same cost to rent the same house.
total gross= depends on exchange rate, sounds better if I quote it in NZ dollars. : )
Have over 300k equity.
Must admit to buying 1st house before the jumped in price - approx $100 increase in 3 years.
Now focusing on reducing debt on PPOR , once this is at a comfortable level ( I want to own 40% of portfolio).
If I was 18 again I would go out to the mines and work and save deposits for house. However now have a good career and lifestyle in Brisbane so Mining life doesnt seem to be worth the xtra $$$.
Helps now with having a working partner, having both incomes makes it so much easier to save without having to live in flatmate situation etc.
I am 26 years old.
Left high school at 18, brought 1st house at when I had just turned 20.
Worked all the time to buy the house, at one stage had 3 jobs on the go, approx 80 hours working per week, worth it though because I saved quickly.
Lived in the house for 18 months and got some flatmates which was awesome- ended up making great money from doing things like renting out my garage to one of flatmates freinds for his project car etc. We all used to have a great time aswell, partying etc- meanwhile they were helping me pay off my mortgage.
traveled overseas for 3 months and rented my first house out to proper tenants.
brought 2nd house at about 22 , borrowed against the equity in the 1st house and property was cashflow neutral from day 1.
Moved to aussie- (from NZ) in 2007, saved for a deposit and brought PPOR with partner in Dec 2008 in Brisbane.
still have all 3 houses, paper value approx $530k in NZ. approx $485k in Australia. Cashflow positive in NZ. PPOR in aussie by approx same cost to rent the same house.
total gross= depends on exchange rate, sounds better if I quote it in NZ dollars. : )
Have over 300k equity.
Must admit to buying 1st house before the jumped in price - approx $100 increase in 3 years.
Now focusing on reducing debt on PPOR , once this is at a comfortable level ( I want to own 40% of portfolio).
If I was 18 again I would go out to the mines and work and save deposits for house. However now have a good career and lifestyle in Brisbane so Mining life doesnt seem to be worth the xtra $$$.
Helps now with having a working partner, having both incomes makes it so much easier to save without having to live in flatmate situation etc.
Am 27...Have three properties, worth a total of approx. $785k. $180k equity, and portfolio is just on cashflow neutral.
Looking at acquiring another cashflow neutral property, quick reno, then revalue all properties and start looking towards acquiring a terrace in paddo/surry hills/darlinghurst area and renovate this year.
Up until 6 months ago salary dictated I can only accumulate cash flow neutral/+ve properties, now looking to add some nice CG'ers into the mix. (its. nice when you do the same Job in Tasmania, then migrate to Sydney and get paid an extra $50k
)!!!!!!!!!
Looking at acquiring another cashflow neutral property, quick reno, then revalue all properties and start looking towards acquiring a terrace in paddo/surry hills/darlinghurst area and renovate this year.
Up until 6 months ago salary dictated I can only accumulate cash flow neutral/+ve properties, now looking to add some nice CG'ers into the mix. (its. nice when you do the same Job in Tasmania, then migrate to Sydney and get paid an extra $50k
)!!!!!!!!!
I certainly do have more plans, probably not in the very short term, but should definitely have another in about 12-15 months.
Bumping the thread up...
So how are people going? I have been tossing up whether I can afford another IP. PI is a cruel journey sometimes.... Lots of waiting between accumulating!
Sitting at 76% LVR at the moment, so a bit hesitant to purchase another IP, however if I include the cash that we have saved up in the offset account the adjusted LVR is 71%. (perhaps this wouldn't be called LVR any more, but loan to assets ratio?) Going by this adjusted LVR alone it seems we'd be able to accommodate another loan without the LVR getting too out of hand.
Both Ips are CF neutral at the moment, but I know we are in for a few more IR rises so am very hesitant to commit to another IP. Also will be taking at least 6 months off work next year, so all the signs are pointing to NOT buying another IP, right? (on the other hand it might be better to get the money from the bank and run before they find out I'm not working??)
My strategy was going to be one similar to dollar cost averaging... buy about $500k worth of property every couple of years. It's what we've done so far since buying the PPOR in 2008 and just recently, the 2 IPs in 2010. I believe in time in the market, not timing the market. But it's the waiting that gets me.... according to our plan we won't be buying until late 2011 or 2012. Anyone else in the position where you really, really want to buy something but reason is calling your name?
Another thought to consider is whether we are perhaps overweight in property compared to equities. Our main exposure to shares is via super - hubby has $30k and I have $20k (we have only been working a couple of years, I think many of you would be in the same position??). In comparison we have a lot more invested in property! (especially if you include the PPOR, which, though we don't receive rent from it, I still consider it as an "investment" because it saves us paying rent and goes up in value pretty much every year. Hmmm, now that I think about it, should PPORs should be considered as investments??) But I digress. Even if the PPOR isn't counted as a property investment, we still have a lot more money in property than in shares due to gearing at 80% LVR...
How do you see shares, managed funds etc as fitting into your overall investment scheme??
Wow, I meant to post an update to the young investors thread but looks like I should've started a whole new thread!!
So how are people going? I have been tossing up whether I can afford another IP. PI is a cruel journey sometimes.... Lots of waiting between accumulating!
Sitting at 76% LVR at the moment, so a bit hesitant to purchase another IP, however if I include the cash that we have saved up in the offset account the adjusted LVR is 71%. (perhaps this wouldn't be called LVR any more, but loan to assets ratio?) Going by this adjusted LVR alone it seems we'd be able to accommodate another loan without the LVR getting too out of hand.
Both Ips are CF neutral at the moment, but I know we are in for a few more IR rises so am very hesitant to commit to another IP. Also will be taking at least 6 months off work next year, so all the signs are pointing to NOT buying another IP, right? (on the other hand it might be better to get the money from the bank and run before they find out I'm not working??)
My strategy was going to be one similar to dollar cost averaging... buy about $500k worth of property every couple of years. It's what we've done so far since buying the PPOR in 2008 and just recently, the 2 IPs in 2010. I believe in time in the market, not timing the market. But it's the waiting that gets me.... according to our plan we won't be buying until late 2011 or 2012. Anyone else in the position where you really, really want to buy something but reason is calling your name?
Another thought to consider is whether we are perhaps overweight in property compared to equities. Our main exposure to shares is via super - hubby has $30k and I have $20k (we have only been working a couple of years, I think many of you would be in the same position??). In comparison we have a lot more invested in property! (especially if you include the PPOR, which, though we don't receive rent from it, I still consider it as an "investment" because it saves us paying rent and goes up in value pretty much every year. Hmmm, now that I think about it, should PPORs should be considered as investments??) But I digress. Even if the PPOR isn't counted as a property investment, we still have a lot more money in property than in shares due to gearing at 80% LVR...
How do you see shares, managed funds etc as fitting into your overall investment scheme??
Wow, I meant to post an update to the young investors thread but looks like I should've started a whole new thread!!
I think the ppor isnt really considered as an investment in the sense that it doesnt bring you in any income, it just adds to your non tax deductable debt. We are currently living in our ppor but before the years end we wil be moving out to rent. I did the figures for our situation and renting will mean all of our debt is tax deductable and save us just under 6k after tax!
Personally, we will get our ppor when we have kids because at the moment we would rather rent and reinvest what we save with the goal of buying our ppor with cash when we do buy. Its just one of those things thats just each to their own.
Nothing much to update with us, still renovating and saving slowly. Although, buying the missus an engagement ring this weekend...so the might take a bit out!
Personally, we will get our ppor when we have kids because at the moment we would rather rent and reinvest what we save with the goal of buying our ppor with cash when we do buy. Its just one of those things thats just each to their own.
Nothing much to update with us, still renovating and saving slowly. Although, buying the missus an engagement ring this weekend...so the might take a bit out!
Hi guys
I’m 27, the aim is to have eight properties by the time I hit 30.
In late 2007, after being overseas for two years my then partner (now husband) and I bought our first PPOR (three bedroom townhouse in Canberra). At this stage our only aim was to pay off this PPOR as fast as possible.
In August 2009 I tossed up the idea of renovating and selling a house. My husband and I ended up having a long chat with a REA at LJ Hooker who talked us through the pro’s and con’s of buying, renovating and selling and property investment in general – he also steered us towards some good books . To this day, I don’t know why he showed such an interest in us (giving us two hours of his time) – it’s easy to think that he wanted to sell us property but he actually talked us out of buying then and there. We are forever grateful and make sure we keep him informed of our progress.
We had our PPOR re-valued and took out a LOC for $50k. This was used as a deposit for IP#1 and IP#2.
IP#1
In October 2009 we exchanged on a 2-bedroom unit in Queanbeyan, NSW. We bought under market value – the vendors being desperate to sell because their tenant was a drug addict who hadn’t paid any rent. Renovations were done after exchange and before settlement.
We spent just over $2,500 on renovations – new kitchen (wholesale price courtesy of my brother), tiled over existing tiles in the bathroom, new vanity (free, thanks to my dad who is a cabinet maker) and new paint. We also did a lot of cleaning…. The property was re-vauled at $40k more than we bought it for.
IP#2
In January 2010 we bought a three-bedroom house in Wagga Wagga, NSW. This is tenanted and is neutrally geared.
IP#3
We are due to exchange on IP#3 in the next couple of days. It’s a three-bedroom house in Canberra. The deposit will be from our LOC from IP#1. It will eventually become our PPOR. When we rent out our current PPOR it will be neutrally geared.
It hasn’t been easy and I owe a lot of this to my husband. He was the one who read all the books and researched properties and financing until late into the night. It also helps that we have a good mortgage broker as it would have been so easy for us to make mistakes in structuring our finances. I’m confident that we will do well with our properties in the long run but most of all I’m happy for my husband who's found something that he's really passionate about and is now starting his training as a mortgage broker.
I’m 27, the aim is to have eight properties by the time I hit 30.
In late 2007, after being overseas for two years my then partner (now husband) and I bought our first PPOR (three bedroom townhouse in Canberra). At this stage our only aim was to pay off this PPOR as fast as possible.
In August 2009 I tossed up the idea of renovating and selling a house. My husband and I ended up having a long chat with a REA at LJ Hooker who talked us through the pro’s and con’s of buying, renovating and selling and property investment in general – he also steered us towards some good books . To this day, I don’t know why he showed such an interest in us (giving us two hours of his time) – it’s easy to think that he wanted to sell us property but he actually talked us out of buying then and there. We are forever grateful and make sure we keep him informed of our progress.
We had our PPOR re-valued and took out a LOC for $50k. This was used as a deposit for IP#1 and IP#2.
IP#1
In October 2009 we exchanged on a 2-bedroom unit in Queanbeyan, NSW. We bought under market value – the vendors being desperate to sell because their tenant was a drug addict who hadn’t paid any rent. Renovations were done after exchange and before settlement.
We spent just over $2,500 on renovations – new kitchen (wholesale price courtesy of my brother), tiled over existing tiles in the bathroom, new vanity (free, thanks to my dad who is a cabinet maker) and new paint. We also did a lot of cleaning…. The property was re-vauled at $40k more than we bought it for.
IP#2
In January 2010 we bought a three-bedroom house in Wagga Wagga, NSW. This is tenanted and is neutrally geared.
IP#3
We are due to exchange on IP#3 in the next couple of days. It’s a three-bedroom house in Canberra. The deposit will be from our LOC from IP#1. It will eventually become our PPOR. When we rent out our current PPOR it will be neutrally geared.
It hasn’t been easy and I owe a lot of this to my husband. He was the one who read all the books and researched properties and financing until late into the night. It also helps that we have a good mortgage broker as it would have been so easy for us to make mistakes in structuring our finances. I’m confident that we will do well with our properties in the long run but most of all I’m happy for my husband who's found something that he's really passionate about and is now starting his training as a mortgage broker.
Great stuff Pretzel.
You are doing well, 3 IP's and a PPOR! Good purchases too by what you have written up!
I have only really started getting into the whole PI stuff and I feel somewhat like your husband! Can't get away from it now, every time I learn something new and interesting I just have to go tell someone and explain to them how it all works! I'm hoping to start a financial course soon...what does your husband do as a job atm?
You are doing well, 3 IP's and a PPOR! Good purchases too by what you have written up!
I have only really started getting into the whole PI stuff and I feel somewhat like your husband! Can't get away from it now, every time I learn something new and interesting I just have to go tell someone and explain to them how it all works! I'm hoping to start a financial course soon...what does your husband do as a job atm?
How'd the engagement ring shopping go, AndrewT? How exciting, reminds me of when my (now) husband bought my engagement ring, we were both poor students at the time (lived off 2 minute noodles etc) so the price seemed rather astronomical at the time!
Has she said yes yet?
Pretzel, fantastic stuff! And a really good write-up too. I notice that your 1st PPOR will now be an IP. For tax deductibility reasons.... did you have an offset against it or were you paying off the principal? It's why I go around saying to all my friends, get an IO loan (if they are disciplined enough to treat it like a P&I loan) because a PPOR may not always stay so. (Original thanks to my mortgage broker for convincing us away from a P&I loan when I was dead set on it!)
Just bumping this thread up to say that the latest API has a really good cover story on young investors under 30. I found the article hugely inspiring. Hubby and I have only been buying property for 1.5 years, (and our 1st 2 investment properties were purchased only a couple months ago), so we haven't seen massive equity gains like the investors profiled (some of them started buying when they were 21, about 6 or 7 years ago, and have seen their money double already! good on them.) Although our PPOR has gone up 20% in value (sydney's inner west just went crazy from 2009-2010) so we are considering taking some equity out of it for our next IP deposit.
I hope the API does another young investors article again in a few years time, because I want to be in it Have set some lofty goals that we should be able to achieve, it involves buying property every year until I turn 30. The end result will be fairly similar to Pretzel's (6-8 IPs before I turn 30, or about $2.4m of IPs in today's dollars, not including PPOR). (The number is not precise because we may end up buying fewer expensive IPs as opposed to more cheapies).
HOWEVER I have yet to find out how much a stumbling block the impending pregnancy will be (due to unpaid leave). I know could service a purchase every year but it's fulfilling the bank's stricter requirements that I'm worried about. At the moment we live off hubby's salary and save mine for IP deposits... which means that if I didn't work, we'd either be stagnant or going backwards (due to increased baby expenses) rather than going forwards! And it might be more difficult to get a loan immediately after the birth (I want to buy again within 6 months after baby is born, but by then my unpaid leave months would show up in the system).
Excuse the ramblings, but go and read this month's API if you feel like you need a little bit of inspiration to get you going!
Has she said yes yet?
Pretzel, fantastic stuff! And a really good write-up too. I notice that your 1st PPOR will now be an IP. For tax deductibility reasons.... did you have an offset against it or were you paying off the principal? It's why I go around saying to all my friends, get an IO loan (if they are disciplined enough to treat it like a P&I loan) because a PPOR may not always stay so. (Original thanks to my mortgage broker for convincing us away from a P&I loan when I was dead set on it!)
Just bumping this thread up to say that the latest API has a really good cover story on young investors under 30. I found the article hugely inspiring. Hubby and I have only been buying property for 1.5 years, (and our 1st 2 investment properties were purchased only a couple months ago), so we haven't seen massive equity gains like the investors profiled (some of them started buying when they were 21, about 6 or 7 years ago, and have seen their money double already! good on them.) Although our PPOR has gone up 20% in value (sydney's inner west just went crazy from 2009-2010) so we are considering taking some equity out of it for our next IP deposit.
I hope the API does another young investors article again in a few years time, because I want to be in it
Have set some lofty goals that we should be able to achieve, it involves buying property every year until I turn 30. The end result will be fairly similar to Pretzel's (6-8 IPs before I turn 30, or about $2.4m of IPs in today's dollars, not including PPOR). (The number is not precise because we may end up buying fewer expensive IPs as opposed to more cheapies).HOWEVER I have yet to find out how much a stumbling block the impending pregnancy will be (due to unpaid leave). I know could service a purchase every year but it's fulfilling the bank's stricter requirements that I'm worried about. At the moment we live off hubby's salary and save mine for IP deposits... which means that if I didn't work, we'd either be stagnant or going backwards (due to increased baby expenses) rather than going forwards! And it might be more difficult to get a loan immediately after the birth (I want to buy again within 6 months after baby is born, but by then my unpaid leave months would show up in the system).
Excuse the ramblings, but go and read this month's API if you feel like you need a little bit of inspiration to get you going!
Hi,
I'm 29 and own 3 IP in Adelaide. Just signed contract for No4 IP in Gladstone QLD.
Bought First IP 2br Unit@ age 21
2nd 3 br house @ 23
Built New 4 br house @ 28
Currently building 4th IP
The 3 properties are pretty much cashflow neutral
No4 will be negatively geared so i am looking for a +CF property at the moment to balance the portfolio out again.
Total Portfolio Value(Bank Values) $1.3Mil
Equity... not much..haha..close to 90% LVR after purchase of No 4.
I have also Travelled the world quite alot and have a 2yr old daughter. Life is all about balance, can't just put all your money into investments.. gotta enjoy it to cos life is short and it can end @ anytime!!
I'm 29 and own 3 IP in Adelaide. Just signed contract for No4 IP in Gladstone QLD.
Bought First IP 2br Unit@ age 21
2nd 3 br house @ 23
Built New 4 br house @ 28
Currently building 4th IP
The 3 properties are pretty much cashflow neutral
No4 will be negatively geared so i am looking for a +CF property at the moment to balance the portfolio out again.
Total Portfolio Value(Bank Values) $1.3Mil
Equity... not much..haha..close to 90% LVR after purchase of No 4.
I have also Travelled the world quite alot and have a 2yr old daughter. Life is all about balance, can't just put all your money into investments.. gotta enjoy it to cos life is short and it can end @ anytime!!
The day I bought the engagement ring for my wife, I got a huge migraine, and had to go home from work sick. I ended up in hospital on a drip!
I don't know whether the cause was the sparkling of the diamond, or the handing over of cash.
Hi guys
i'm 26 and purchased PPOR late 2007 in Queanbeyan NSW for $420,000.
Now owe $380,000 and having completed $6,000 reno (new flooring, paint, all new wiring throughout, 30 odd downlights, knockdown walls, new internal doors) PPOR value is now $450,000+
Keen to buy 1st IP before June 2010 just not sure on how to use my finances to do so. Any ideas? Refinance, LOC etc...
Pretzel, can you tell me who your mortgage broker was that you speak so highly of?
Big thumbs up to all Young Guns who posted their stories, it gives me a good kick up the **** to get motivated and start buying IP's. Too much procrastinating on my behalf.
Well done guys!!
i'm 26 and purchased PPOR late 2007 in Queanbeyan NSW for $420,000.
Now owe $380,000 and having completed $6,000 reno (new flooring, paint, all new wiring throughout, 30 odd downlights, knockdown walls, new internal doors) PPOR value is now $450,000+
Keen to buy 1st IP before June 2010 just not sure on how to use my finances to do so. Any ideas? Refinance, LOC etc...
Pretzel, can you tell me who your mortgage broker was that you speak so highly of?
Big thumbs up to all Young Guns who posted their stories, it gives me a good kick up the **** to get motivated and start buying IP's. Too much procrastinating on my behalf.
Well done guys!!
Hi guys - sorry for the late response I had stopped watching this thread.
We are paying principal on our current PPOR. When we bought the property we were finding it hard it get finance because we had only been back in Australia for about three months and were both still on probation. We are due to refinance though in January - can't wait
Our mortgage broker is Ptbear - he is on this forum - but soon my husband (Mortza) will be brokering any deals for us which will be very handy. Mortza is his Somersoft username - I wouldn't of married him if it was his real name
vK350 - if it were me, I would use as much of the bank's money as possible. I would take out a LOC (from PPOR) and use it for a deposit on a house/unit (or two, depending on where you want to buy) and any other associated costs (stamp duty and legal fees). Definitely get professional advice though....
We are paying principal on our current PPOR. When we bought the property we were finding it hard it get finance because we had only been back in Australia for about three months and were both still on probation. We are due to refinance though in January - can't wait
Our mortgage broker is Ptbear - he is on this forum - but soon my husband (Mortza) will be brokering any deals for us which will be very handy. Mortza is his Somersoft username - I wouldn't of married him if it was his real name
vK350 - if it were me, I would use as much of the bank's money as possible. I would take out a LOC (from PPOR) and use it for a deposit on a house/unit (or two, depending on where you want to buy) and any other associated costs (stamp duty and legal fees). Definitely get professional advice though....
Hi everyone, joined up a little while ago when i was looking at buying my 1st property with my gf. I'm 23 she's 21.
We bought a 5yo townhouse in Nov 09 in St Marys for $265k which was under reserve ($280k) and under budget which was great! S**t hit the fan about a month ago so i am now repaying it and living in it myself. Luckily all the money put into the deposit was mine as she had no savings at the time - so i guess that worked out well!
The plan was and still is to purchase 1-2properties/year for the next 15-25years and retire early on my own terms.
I've been looking at similar places in the area and down the road, 3br, 2car, 2bath and they seem to range from $290-350k so that's a positive sign. The property if rented out now would be geared neutral/slightly +ve.
Currently running some numbers to see if i can afford to rent out this place, purchase a 2nd IP and rent somewhere. I'm hoping to be a regular on this forum
We bought a 5yo townhouse in Nov 09 in St Marys for $265k which was under reserve ($280k) and under budget which was great! S**t hit the fan about a month ago so i am now repaying it and living in it myself. Luckily all the money put into the deposit was mine as she had no savings at the time - so i guess that worked out well!
The plan was and still is to purchase 1-2properties/year for the next 15-25years and retire early on my own terms.
I've been looking at similar places in the area and down the road, 3br, 2car, 2bath and they seem to range from $290-350k so that's a positive sign. The property if rented out now would be geared neutral/slightly +ve.
Currently running some numbers to see if i can afford to rent out this place, purchase a 2nd IP and rent somewhere. I'm hoping to be a regular on this forum
Last edited:
Buying a property 265k under reserve when it is worth around 290k is a fantastic effort! Bargain of the century!
Dimmy, welcome to the forum and congratulations on your first purchase. I do have a couple of concerns, though.
Is the property in joint names? If so, is she still paying her share and are you planning on buying her out of her share?
