Buying First IP before PPOR

[norwoodman]

Hi everyone,

I'm currently trying to figure out how to proceed in entering the Adelaide property market. I'm looking to a buy and hold strategy with CF+ (and affordable) properties where possible and to develop a portfolio of investment properties before finding a PPOR.

Currently, I'm living at home and will be for another few years I suspect. My main issue at the moment is a big one in that I'm unemployed and have only saved up about $10k so far towards a deposit and purchasing costs (it'll be a while before I can actually invest ). I'm only 21, just finished a degree in civil & structural engineering - which I intend to put to use in property as well as job - and still have half a year to go on my finance degree, but by the time I start I'd be earning about $60k a year before tax.

Has anyone taken up this route that I am intending to follow, or been in a similar situation? Does anyone have any advice about how I could structure a loan in the best way possible, or advice in general about finding mortgage brokers, accountants or good deals? Would an offset account with an investment loan be preferable to a LOC to use for a deposit for the following IPs? Things to avoid and potential pitfalls (other than CC which I am aware of)?

Thanks.

 

[alexlee]

Great attitude, and buying IPs first before PPOR is a good strategy. I did it that way and I've never regretted it.

As you understand, there isn't much you can do until you've saved more and have a job.

But in the meantime, go read a few books on property investing. You've picked up some of the terms but there are gaps (e.g. what's an investment loan?) Whether a LOC or offset is better partly depends on how much you can save, and whether you understand how not to contaminate deductible and non-deductible debt.

 

[jonmardell]

the net is a great resource tool and you will find most of the information you need such as home loan comparisons, borrowing costs and borrowing capacity ect. My preferred method is to have offset accounts rather then line of credits for investment properties as there is no grey area on tax deductibility in regards to making extra payments and redrawing.