Buying College Square

[padi]

Hi,

I'm thinking of buying Investment Property ~ college square swanston 1BR.

(I know what u guys are thinking .. yet again ... but please hear me out .. I'm not looking for cap growth, just temporary income streaming....)

OKay .. my reasoning is:

I am not after capital growth.
Purpose is: income streaming.
i.e.
One: to boost my income to accumulate 30% deposit for my 2nd investment house ~ thinking of buying a proper investment property (e.g. a proper house or a proper apartment with proper capital growth & rental yield)
Two: 275 net a week, would be helpful to pay off my second IP.

I need about 50K. (purchase price would be 175K)

Question One: Will banks lend me? I have only been working for about 2 years (new graduate).
Btw, my income is 62K & will be 68K in a few mths.

Question Two: will this income streaming method viable?
I am prepared to sell (although gutted) - without any capital growth.


I chose YMCA CS coz:
- rented out easily
- sold easily ~ to other parents of students ... (based from what i heard from my friends' parents ... )

Need ur expert opinions

Thank you!

 

[padi]

and oh ..

I'm thinking of boosting income atm because:

I want to earn passive income ASAP (i want to be an investor & be able to leave day job ASAP ten-fifteen years more realistically with earning handsome income ~ dunno how much yet).

Getting passive income from a student apartment would be helpful to:
- accumulate DP for 2nd house
- to pay off 2nd IP ASAP
- and get the next IP asap too

 

[Aaron_C]

No please don't do it. If you want passive income you might as well put your money into the bank and earn the interest.

 

[padi]

so a 6.2%pa return from savings is higher than the net rental income ya?

 

[Aaron_C]

so a 6.2%pa return from savings is higher than the net rental income ya?

Well not even that. At least in a bank account you can take the money out whenever you want, tomorrow if need be. With a college square apartment you will need to wait months to sell it (if you can ever find a buyer!). Please spare yourself the heartache.

 

[padi]

thanks' aaron!

i guess the way out is old way ~ keep saving ...

unless u've another suggestion ...

 

[Rolf Latham]

One: to boost my income to accumulate 30% deposit for my 2nd investment house ~

why would u need a 30 % deposit ?

Buying a resi dog ?

Or a commercial ?

ta
rolf

 

[padi]

called some banks (cant remr which ones ~ one of the was nab) ...

they advised me that banks prefer 30% deposit when i take out a loan to buy a house (owner occupier or investment)

im not sure how loan works ... i havent done any hw on those stuffs yet ..

btw ...
buying apartment like oak (collins) quest (south melbourne or somewhere near collins/exhibition) ..
are they worth it?
or should i just aim for apt with better cap growth ..
thinking of either qv or southbank ...

qv about 5 years ago worht much less than now ...
but not sure about 5 years from now ...

southbank .. they "planned" to develop it .. so thinking that its cap growth would be good?

ur input?

 

[Rolf Latham]

called some banks (cant remr which ones ~ one of the was nab) ...

they advised me that banks prefer 30% deposit when i take out a loan to buy a house (owner occupier or investment)

im not sure how loan works ... i havent done any hw on those stuffs yet ..

btw ...
buying apartment like oak (collins) quest (south melbourne or somewhere near collins/exhibition) ..
are they worth it?
or should i just aim for apt with better cap growth ..
thinking of either qv or southbank ...

qv about 5 years ago worht much less than now ...
but not sure about 5 years from now ...

southbank .. they "planned" to develop it .. so thinking that its cap growth would be good?

ur input?

Hi Padi


my honest, and heart felt input, is keep saving your money, do a bunch more research, keep saving and money, do some more research on what you want to buy and why, keep saving some money, do a bunch of research on loan options and what works beyond what doesn't, and why they may not.

Download lots and lots of books and reading from from forums like this


then think about making a property purchase.

please don't take it the wrong way, but at the moment you look like a deer in the headlights, waiting for some good salesperson to take you out.

Thanks

Rolf

 

[padi]

lol .. thanks ..

yeah .. ive to do lotsa more readings ... sigh ... its just like studying all over again ...

 

[Rolf Latham]

lol .. thanks ..

yeah .. ive to do lotsa more readings ... sigh ... its just like studying all over again ...

yea, but this is for "real"

no sitting the exam again next semester

do ur dough, u do your dough................

ta

rolf

 

[Melbournian]

buying in college square is suicidal

 

[wobbycarly]

called some banks (cant remr which ones ~ one of the was nab) ...

they advised me that banks prefer 30% deposit when i take out a loan to buy a house (owner occupier or investment)

Don't talk to a bank, talk to a broker. A bank just wants to sell you a product now; a (good) broker will help you with structure, and future planning. There are several brokers on here that I'm sure would be happy to help.

im not sure how loan works ... i havent done any hw on those stuffs yet ..

There is plenty of info around on here. Look up offset and interest only. Do a search in the blogs on here for "offset" and read perp's great summaries and comparisons.

btw ...
buying apartment like oak (collins) quest (south melbourne or somewhere near collins/exhibition) ..
are they worth it?
or should i just aim for apt with better cap growth ..
thinking of either qv or southbank ...

qv about 5 years ago worht much less than now ...
but not sure about 5 years from now ...

southbank .. they "planned" to develop it .. so thinking that its cap growth would be good?

ur input?

Additional development in southbank would just increase the supply. Unless demand keeps up, you will see no growth in either purchase price or yield.

If you want to "start cheap", perhaps look in regionals like Bendigo, Ballarat, Warragul, Traralgon, Mildura - large towns (cities) with diversified industry, etc.

Rolf has given some great advice - you want to get this right the first time or it can take a long time to recover if you muck it up.

 

[mech81]

Hi padi,

Great to see that you are thinking about your financial future.

A couple of quick points to your post overall.

College square and quest are not mainstream investment properties.
With those properties, and Rolf and Aaron (who are mortgage brokers) will agree, it will be difficult to get lending from the banks. You will be looking at a 50% deposit and this will tie up your deposit for your second IP.

Currently, the apartment market is steady in Melbourne but not flash. If confidence in the apartment market decreases with oversupply, those properties are the first to get hit which means that you may not be able to get back what you paid for it despite the +ve cashflow. You may lose more than what you gain in rent. I'd rather buy a CBD carpark instead with less overheads and maintenance.

Like the guys said above, put it into a high interest account for now... do a bit more reading and hang around this forums. You will learn ALOT!! The guys here work in the industry day in day out and give their fair unbiased opinions. Glad to know that you came to this forum beforehand. All the best!!