24 yr old, still living at home..

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The Red Baron

Hi all

Yep i'm a 24 yr old still living at home with the parents and am just starting to think about my next move.

Just thought i'd better say I get along really well with parents, they are happy for me to stay for another year or two. They bought 2 IP's in Perth 3 years ago and just got one the other day in SE Qld. They have offered to help me out but i'd rather try do it myself if possible.

In a few months time i'll be off to Europe to do the whole contiki, oktoberfest thing. Once all that is over its back to reality to time to work out a plan.

The situation is I work full time after tax $515 and also have a part time job doing nightfill after tax $250. After my trip my $65k in the bank will only be $50k which will be around $65 interest a week. I know my earning capacity is my big downfall hence having to work a second job at night.

My weekly outgoings are board $70, transport $50, food $50, entertainment $100, then another $50-70 for bills and other expenses. I have no loans or debts so able to save $500 a week.

I know the major hurdles will be my income and on a single wage. I've also just been told as I have had no loans or been renting I have no credit history of paying off debt.

I was just wondering what my options are?

thankyou
 
Forget the whole credit history thing. It means little.

The only requirement is for you not to have any bad things written in your credit history. An absence of loans is nothing to worry about.

Car dealers used to try to use it to sell expensive finance to youngsters so they would build a credit history which was meaningless!!

Sure you have income challenges. But buying the right property and renting it out or renting out two bedrooms to your hairy mates can help a lot to address the income shortfall.

FHOG and SD exemptions are valuable too.

Don't feel you need to start in a dream house! Most of us started in dumps. My first place was a student infested mess rented to cockroaches .....

More ideas are possible and you would do well to search this forum and spend some weeks reading it. Talk to your parents to as they have some experience. Don't be too proud to accept their help. I know I would be upset if my daughters slowed their investment journey so they could go it alone. I also am dissapointed that my father didn't teach and encourage me let alone help me with a deposit or security. I would be 5 years better off and at least $500K better off too ....
 
I'd be putting $50K now as deposit into an IP and let someone start paying it off while you are overseas. If your parents have just invested in SE Qld why not use their expertise in the area they have just investigated and see what you can afford that will cost you as little as you can.

I live in Brisbane but have our IPs in the same suburb as where we live, so I have not investigated other areas, but people seem to think the corridor heading to the south coast and/or heading to Ipswich are places you can still get a good buy.

And for goodness sake, don't let any women know you have $65K sitting in the bank :eek:

My area of Brisbane has been moving slowly upwards for the past twelve months I reckon and houses don't seem to be on the market for too long before they have a sold sign slapped on them. A real estate agent told my mother this morning that values have risen by 5% so far this year in the Coorparoo area.

I reckon the market is on the move, don't know how much or for how long, but that is how it seems to me. If you can, get in before you go.

Wylie
 
The Red Baron said:
The situation is I work full time after tax $515 and also have a part time job doing nightfill after tax $250.
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If this is weekly, as it sounds, then I wouldn't be classing that as 'low income'. Thats about 50-55k pa isn't it?

Anyway, I would say go and enjoy your trip and don't do anything until you get back. If you buy before you go, being your 1st IP you'll probably spend the entire worrying about it or something equally silly. A few months shouldn't affect you too much. Make sure you put your 50k somewhere you can't touch it while you are gone, unless you know you won't touch it, no matter the temptations over there.

Research as much as you can now and then when you get back go for it. Being single and living at home you have plenty of borrowing capacity (compared to me anyway).

BR
 
The Red Baron said:
They have offered to help me out but i'd rather try do it myself if possible.
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Stop being so proud and accept their offer. It will shave many years off your journey. Ask yourself if your pride is worth more to you than potentially 5+ years of your life lived with financial freedom. Nothing wrong with doing it yourself - I did (but my mum and her fiance gave me 10K after I bought my first - thanks mum and Geoff!) but mate, you'd be silly not to take their offer.

You've got 50K saved, even after your trip? Why haven't you bought a place already? Talk to a broker, they will be able to help you no worries. Plenty on this forum and they don't need to be in your backyard either. Just go out there and get one mate.

Mark
 
Bantam Roosta said:
If this is weekly, as it sounds, then I wouldn't be classing that as 'low income'. Thats about 50-55k pa isn't it?
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It's not low income as such, but i'm working 60hrs a week and not sure I can sustain it for a long time. If I quit my part time job and went back to my 37.5hrs i'd drop back to 35-40k pa.
 
Mark Laszczuk said:
You've got 50K saved, even after your trip? Why haven't you bought a place already? Talk to a broker, they will be able to help you no worries. Plenty on this forum and they don't need to be in your backyard either. Just go out there and get one mate.
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I guess its been a problem of me being too conservative (cash invested in term deposits) and half being in awe of the Perth market the past few years and just sitting back watching. I did three years ago try get a cheap IP but my salary was far too low at the time.

I'm trying to read as much on this forum and the internet to be more educated in property. Like you said i'll talk to a broker and find out the difference in buying a house and getting the FHOG and stamp duty exempt compared to living at home with a IP.

Thanks everyone for your help.
 
you should def accept help. so many people could only dream of a little bit of help.

If your parents can put up a bit of equity and you put up $20k deposit for a good yielding IP then at least you have a buffer of $30k to top up for negative gearing.

In any way, you are in a really good position to buy a property. For properties, the less credit the better. it's different to getting a credit card, a myer card or a personal loan.
 
The Red Baron said:
It's not low income as such, but i'm working 60hrs a week and not sure I can sustain it for a long time. If I quit my part time job and went back to my 37.5hrs i'd drop back to 35-40k pa.
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Fair point. I couldn't cope with 60 hour weeks. I have enough trouble coping with 12 hour weeks. ;)

Although not massive, $40k is still a decent wage. Your mind is in the right place, so just keep at it and you'll be fine.

Oh yeah, take your parents help. I'll probably get some help off my parents one day (the day they die). :D

BR

PS. That was a bit harsh as my parents have been absolutely wonderful and have given me so much over the years that I never really wanted for anything. Sorry mum and dad. :(
 
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The Y-man said:
Oh hell, you're too young to leave home. Didn't do that till I was over 30 :p
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Funny enough most of my cousins stayed til they were 28-30 too. My uncle since they were 18 made board 15% of their net weekly wage. One stage he was getting over $300 from his three daughters and thought enough was enough. Gave them back a bit of what they had put in over the years, ended up being a nice small deposit and off they went.
 
Options:
1. Go overseas and come home and buy a PPOR.
2. Go overseas and come home and buy an IP.
3. Go overseas and come home and do nothing.
4. Don't go overseas and buy a PPOR.
5. Don't go overseas and buy an IP.
6. Don't go overseas and do nothing.
7. Buy an IP and go overseas and come home and buy a PPOR.
8. Buy a PPOR and go overseas and come home and buy an IP.

Don't like # 6 much!:( But the options are all there. Which one do you like the best?
Which one can you manage financially with parent's help and without parent's help?

Good on you for starting early in your 20's! This is the most opportune time to start creating wealth.
 
sailor said:
Options:
1. Go overseas and come home and buy a PPOR.
2. Go overseas and come home and buy an IP.
3. Go overseas and come home and do nothing.
4. Don't go overseas and buy a PPOR.
5. Don't go overseas and buy an IP.
6. Don't go overseas and do nothing.
7. Buy an IP and go overseas and come home and buy a PPOR.
8. Buy a PPOR and go overseas and come home and buy an IP.
Click to expand...

I'd have to say #1 and #2 are the front runners. I really want to go overseas enjoy myself, get it out my system and come back and get serious.

Like a few people have mentioned i'll have to sit down, spend a few hours a night researching, learning and do a few calculations.

I guess I was lucky at a young age learning about saving and compounding interest. I remember doing paper deliveries at 15 and putting my money in a term deposit. At the end of the 12mths i made $200 interest, 10 weeks worth of paper deliveries I was over the moon.

I do feel sorry for the young kids growing up now through. My brothers mates are 18, $40k car for new ute, $150 a mth mobile bill, $5k owing interest free plasma.
 
The Y-man said:
In all seriousness though, I hope my parents and my parents in law spend every last cent they have and deserve - it's theirs to spend and enjoy.
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I hope my parents do exactly the same thing. I know they are stressing about my younger brother, sister and I being able to get our own house.

I just convinced them to book a cruise around Australia. They haven't been on a trip for 10 years, apart from the 2hr drive down south every few years.

Now just need to convince the old man to sell the house and buy the winnebago once all us kids are out the house!
 
Dont understand the young, "I want to go overseas once in my life, then start doing what it takes to make a living."
eldest daughter wants to go to Dominican republic. whine is her not you, but....

Buy Home & IP(s) then in a few years (and time flies) go overseas every year see everything. Little Donnie Trump, did not go on a Kontiki tour
Posted From Canada. third passport, others full, not expired,
 
The Red Baron said:
I'd have to say #1 and #2 are the front runners. I really want to go overseas enjoy myself, get it out my system and come back and get serious.
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On my occasional lecturing gigs, I tell the students that's ok - spend a year or two partying, travelling and "getting it out of your system".

The key point is this - to draw a line after 24 months (or whatever time limit you decide) and from that point - really knuckle down. If you can't be a millionaire by the age of 30 - your strategy needs serious reviewing.

Cheers,

The Y-man
 
The Red Baron said:
Like a few people have mentioned i'll have to sit down, spend a few hours a night researching, learning and do a few calculations.
Click to expand...

Mate, go out there, get yourself an I.P.while you are learning. It's not rocket science - especially with your parents being investors. Property is a very forgiving asset, especially when you start young. Beware of analysis paralysis!

Mark
 
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