17 y/o Interested In IP

[Infest]

Hi.

I'm 17 years old and am looking at buying an IP over a nice/new car. I don't know much about IP's. My parents told me it would be an excellent idea and back me 100%.

I live in Warner, Brisbane and would want to buy somewhere nearby. Just wondering if this is a good idea, and what my next steps would be if I were to go through with it.

Thanks.

 

[JoannaK]

of course it's a good idea, and congratulations to you on being so sensible at such a young age.

Of course, you can't sign a contract till you turn 18 though, but that certainly doesn't stop you from planning your purchase now.

I bought my first place whenn I was 18 years old, and I haven't done too badly out of property...so all the best to you!

You've got my kudos.

 

[Infest]

of course it's a good idea, and congratulations to you on being so sensible at such a young age.

Of course, you can't sign a contract till you turn 18 though, but that certainly doesn't stop you from planning your purchase now.

I bought my first place whenn I was 18 years old, and I haven't done too badly out of property...so all the best to you!

You've got my kudos.

Yes well, I'm not too far off 18. But if I were to go through with it, couldn't my parents sign for it, and somehow transfer it over to me, once I hit legal age? (EG: Go as my guarators.)

 

[steveadl]

Extremely good idea! Go for it! Really regret not buying a unit that my parents suggested when I was 17.

There is a lot you need to consider first, but perhaps start by working out how much you can actually afford to spend on the property depending on how much money you have/will save first. Then work out what $ figure you can contribute to the property if it's not cashflow positive.

This at least gives you an idea of what sort of price bracket you can look at. Then from there you can decide on house/unit etc., location and all the other fun stuff!

You've come to the perfect place to ask as many questions as you want on any property subject! Wish I knew about this place when I was 17!

 

[JoannaK]

Yes well, I'm not too far off 18. But if I were to go through with it, couldn't my parents sign for it, and somehow transfer it over to me, once I hit legal age? (EG: Go as my guarators.)

I don't think this can happen as you'd be up for stampt duty and other transfer costs again.

Spend this time doing your research, and do it right the first time.

 

[Infest]

Extremely good idea! Go for it! Really regret not buying a unit that my parents suggested when I was 17.

There is a lot you need to consider first, but perhaps start by working out how much you can actually afford to spend on the property depending on how much money you have/will save first. Then work out what $ figure you can contribute to the property if it's not cashflow positive.

This at least gives you an idea of what sort of price bracket you can look at. Then from there you can decide on house/unit etc., location and all the other fun stuff!

You've come to the perfect place to ask as many questions as you want on any property subject! Wish I knew about this place when I was 17!

I was recommended to this place from someone off another forum. How would I go about knowing figures? A deposit on a house is 5-10%, correct? And if I have a 20% deposit, I don't pay stamp duty, yes? I would only be looking at something cheap at the moment. I looked up (using a Commonwealth Bank calculator) and it said I can borrow around $25000, this would go onto my current funds + the FHOG.

 

[TheCamel]

Welcome infest.. nice to see you took the advice frmo OCAU.


Personally, I think it's an excellent idea. I wanted to buy when I was 21.. but messed around for 4 years. As a result, I think i suffered.. but just yesterday I got my first lease signed, and it's only onwards and upwards from here.
I voted yes. Go with it. You is no reason you should regret it.

Look at it as an investment - live at home while you can, and let your parents help support you if they will. Do you want to go to uni or anything like that ?

Steve has it on the nose - work out your finances, what you can afford etc.
Wait until you're 18 to sign a contract, it avoids the stamp duty to changei t over from your parents name etc.

 

[Mr. Fabulous]

Nice one! Yeah I agree it's a good idea. Great nick by the way - Infest are one of my favourite bands.

Mark

 

[Mr. Fabulous]

I was recommended to this place from someone off another forum. How would I go about knowing figures? A deposit on a house is 5-10%, correct? Depends on how much deposit you want to put down.

And if I have a 20% deposit, I don't pay stamp duty, yes? You'll still pay stamp duty, but you won't pay lender mortgage insurance. Note that in QLD, when you buy your first PPOR, you get a stamp duty exemption up to $250,000 purchase price. I dunno if it applies to investment properties.

I would only be looking at something cheap at the moment. I looked up (using a Commonwealth Bank calculator) and it said I can borrow around $25000, this would go onto my current funds + the FHOG.

$25,000? Are you sure you didn't mean to say $250,000?

Mark

 

[TheCamel]

I was recommended to this place from someone off another forum. How would I go about knowing figures? A deposit on a house is 5-10%, correct? And if I have a 20% deposit, I don't pay stamp duty, yes? I would only be looking at something cheap at the moment. I looked up (using a Commonwealth Bank calculator) and it said I can borrow around $25000, this would go onto my current funds + the FHOG.

Not quite. As we're talking an investment, you would pay stamp duty costs.. once you get the FHOG you may not, but lets leave that for now..

With a 20% deposit, you won't pay LMI which is a mortgage insurance fee.

A broker will be heaps better at tellin you how much you can borrow..

 

[JoannaK]

I was recommended to this place from someone off another forum. How would I go about knowing figures? A deposit on a house is 5-10%, correct? And if I have a 20% deposit, I don't pay stamp duty, yes? I would only be looking at something cheap at the moment. I looked up (using a Commonwealth Bank calculator) and it said I can borrow around $25000, this would go onto my current funds + the FHOG.

A standard deposit is 20% of purchase price, and if you have that then you don't pay Lenders Mortgage Insurance. Anything less than 20% will incur the LMI.

I don't know the laws in QLD about stamp duty and first homes.

If you're going to claim the FHOG you'll need to be careful as you have to live in the place for about 6 months (i think)...but I suspect that you'll also need to account for the rent for your servicability, so there might be a bit of a glitch there, but certainly nothing to be overly concerned about..

To know your figures, first start by researching the market that you're looking at, and look specifically at the selling prices of houses and the rental yields achieved for those types of properties. Then, any mortage broker will be able to help you work out your borrowing capacity. There are also several calculators tucked away in old posts that you could search that would be able to help calculate this.

 

[steveadl]

I was recommended to this place from someone off another forum. How would I go about knowing figures? If you want to share some of your figures here, people love helping each other out, there are also brokers here who know what they're talking about. Or you could talk to a broker in person. A deposit on a house is 5-10%, correct? Depends on your situation, if it's an investment, it's usually closer to 80% - you can get them at 90% but you usually pay higher fees. And if I have a 20% deposit, I don't pay stamp duty, yes? No you always pay stamp duty, if you only borrow 80% you don't have to pay Lenders Mortgage Insurance which usually amounts to $1500+ depending on loan amount. I would only be looking at something cheap at the moment. I looked up (using a Commonwealth Bank calculator) and it said I can borrow around $25000, this would go onto my current funds + the FHOG.Do you mean get a personal loan for $25k, then borrow more for a house? If so, the personal loan will be taken into acc. and they bank may not lend you as much for the house. You only get the FHOG if you move in at some point within 1yr from purchase and stay there for 6 months.

Typing here because message was too short

 

[letiha]

Hi.

I live just around the corner from warner and am building at warner lakes, have a search on realestate.com.au and see what things are selling for.

I think $250,000 will get you a unit in warner/strathpine, although I think you'd be better of buying in a different suburb if you only have that much.

But you never know, there are a few suburbs like kallangur and petrie that you might beable to get an older 3 bedroom and fix it up while you live in it to get the first home owners grant.

 

[Infest]

Not quite. As we're talking an investment, you would pay stamp duty costs.. once you get the FHOG you may not, but lets leave that for now..

With a 20% deposit, you won't pay LMI which is a mortgage insurance fee.

A broker will be heaps better at tellin you how much you can borrow..

Yes, I will first talk about it with my parents before talking to a broker.

Do you want to go to uni or anything like that ?

No, I don't want to go study. My aunty and uncle are living off the money they make from buying selling houses. I think this would be a good way to live, but also have some sort of casual job for fun.

 

[VYBerlinaV8]

I am going to offer a different opinion. Unless you have some form of substantial income, I think 17 is probably too young to be buying an IP. If something goes wrong, you probably won't have the cashflow to support your position, and may materially damage your prospects over the next few years.

Let me instead suggest an alternative. Research and buy your self a share portfolio, using some gearing if you wish. Margin loans are much easier to get than property loans. That way, you can continue to learn about investing, and generate some good returns that will build your equity position for when you are ready to buy an IP. In 5 years time you will still only be 22, and will likely have had some good returns by then.

Shares tend to be more manageable than property, and you can enter the market in smaller 'chunks'. They are also more liquid than property. If you aren't comfortable choosing shares, buy one or more funds.

I commend you for starting young - it's a great thing to do. Use the experience of being a young investor to learn and grow your equity.

This is just my opinion, others should feel free to constructively criticise.

 

[JIT]

I don't think it's necessarily a good idea to buy a property at this age.

Certainly worth reading and learning about it, and good that you have some interest in it so early. Most your age would opt for a new car rather than a property.

There's so much more ahead of you at 17 y/o, why do you want to committ yourself to a mortgage so soon?

Depends on your personal situation, but there are so many variables to consider and it's hard to comment further because of this.

GSJ

 

[Infest]

Hi.

I live just around the corner from warner and am building at warner lakes, have a search on realestate.com.au and see what things are selling for.

I think $250,000 will get you a unit in warner/strathpine, although I think you'd be better of buying in a different suburb if you only have that much.

But you never know, there are a few suburbs like kallangur and petrie that you might beable to get an older 3 bedroom and fix it up while you live in it to get the first home owners grant.

I currently live in Warner Lakes. Just moved in recently. Sonata Drive

 

[JIT]

What sort of job/income do you have to service a loan?

GSJ

 

[Infest]

I don't think it's necessarily a good idea to buy a property at this age.

Certainly worth reading and learning about it, and good that you have some interest in it so early. Most your age would opt for a new car rather than a property.

I wanted a new car, but parents said I would be wiser to get a house.

There's so much more ahead of you at 17 y/o, why do you want to committ yourself to a mortgage so soon?

To be financially better off in the future.

 

[Infest]

What sort of job/income do you have to service a loan?

GSJ

Currently make between $300-$800 a week, due to school it differs lots. I have been offered a job after school at where I work, which it should then increase to just over $900, if I work a full 40 hour week.