Hi everyone! I’ve been lurking around here for a few days soaking up as much information as possible, in the months I’ve been researching property this forum is the best resource I’ve found. Terrific website.
Here’s my situation.
I’m currently deployed in Afghanistan with the defence force and while I’m on good money with limited expenses I’ve paid off my personal debts and I’m saving a deposit for an IP. When not deployed my wage is quite modest, but hopefully by using sensible investing techniques I can slowly create wealth as others strive to on this forum.
Once I’m home I should have a $90,000 deposit set aside.. exciting.
I am considering two options for my IP, both very different in terms of investment strategy and I would like your thoughts on which one is the wiser choice.
Option 1: Conservative cash flow biased. (Income left over to save for another deposit: I’d estimate $200 a week/ 11k p.a.)
Buy an off the plan two bedroom unit in Highett, Victoria (close to my home town) from a friend who owns the property and is developing it. I believe the price is favourable (I will review Residex to confirm, at the moment I am relying on domain.com.au recent sales.)
The location is excellent (close to public transport, the beach, parks, schools, local shops and a major Westfield shopping centre) though being a unit capital growth would probably be sluggish. Yield would be excellent however (my repayments to service the mortgage at 8% interest would be $20 a week) and it doesn’t hurt that a friend works for the local real-estate agent and sources tenants for rental properties.
Option 2: More aggressive, higher LVR, gapital gains biased. (Little (..nothing) left over for savings depending on how high I leverage.)
I’m based in Brisbane so I could buy a house to live in taking advantage of the FHBG plus $17,000 ADF Home Purchase Assistance Scheme (the grant is taxed so 10k in reality) I would employ a buyer’s agent recommended by this forum to source a suitable property. Buying a house I would need to increase my loan amount – securing something in decent condition to avoid high maintenance costs down the track. I would live in the property for 12 months (HPAS requirement) while renting out one of the bedrooms to help service the mortgage.
Does one of these options stand out above the other? I understand that generally the primary reason to invest in property is for capital growth but option one is just so straight forward. I would like to grow an investment portfolio in the coming years as a primary means of wealth creation, equity doesn’t seem like a problem as I’ll have over 100k by the time I want IP2.. having the deposit to bring down servicing IP2 may be more of a challenge as with a position in the defence force my wage will only slowly crawl up towards $60,000. It will take some time to put another deposit together if I can only save 11k a year.
Any light that can be shed on which investment makes more financial sense or any other useful observations would be greatly appreciated.
Here’s my situation.
I’m currently deployed in Afghanistan with the defence force and while I’m on good money with limited expenses I’ve paid off my personal debts and I’m saving a deposit for an IP. When not deployed my wage is quite modest, but hopefully by using sensible investing techniques I can slowly create wealth as others strive to on this forum.
Once I’m home I should have a $90,000 deposit set aside.. exciting.
I am considering two options for my IP, both very different in terms of investment strategy and I would like your thoughts on which one is the wiser choice.
Option 1: Conservative cash flow biased. (Income left over to save for another deposit: I’d estimate $200 a week/ 11k p.a.)
Buy an off the plan two bedroom unit in Highett, Victoria (close to my home town) from a friend who owns the property and is developing it. I believe the price is favourable (I will review Residex to confirm, at the moment I am relying on domain.com.au recent sales.)
The location is excellent (close to public transport, the beach, parks, schools, local shops and a major Westfield shopping centre) though being a unit capital growth would probably be sluggish. Yield would be excellent however (my repayments to service the mortgage at 8% interest would be $20 a week) and it doesn’t hurt that a friend works for the local real-estate agent and sources tenants for rental properties.
Option 2: More aggressive, higher LVR, gapital gains biased. (Little (..nothing) left over for savings depending on how high I leverage.)
I’m based in Brisbane so I could buy a house to live in taking advantage of the FHBG plus $17,000 ADF Home Purchase Assistance Scheme (the grant is taxed so 10k in reality) I would employ a buyer’s agent recommended by this forum to source a suitable property. Buying a house I would need to increase my loan amount – securing something in decent condition to avoid high maintenance costs down the track. I would live in the property for 12 months (HPAS requirement) while renting out one of the bedrooms to help service the mortgage.
Does one of these options stand out above the other? I understand that generally the primary reason to invest in property is for capital growth but option one is just so straight forward. I would like to grow an investment portfolio in the coming years as a primary means of wealth creation, equity doesn’t seem like a problem as I’ll have over 100k by the time I want IP2.. having the deposit to bring down servicing IP2 may be more of a challenge as with a position in the defence force my wage will only slowly crawl up towards $60,000. It will take some time to put another deposit together if I can only save 11k a year.
Any light that can be shed on which investment makes more financial sense or any other useful observations would be greatly appreciated.
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