First Home Buyer Suggestions

[anthonya]

Hi all,

Would just like your opinion as i'm thinking on purchasing my first property.

I'm a 24 year old single male on a $70,000 gross income.

I plan to save a $60,000 deposit (including the FHBG) in order to buy a 2 bedroom unit/townhouse/villa in Parramatta/North Parramatta for up to $350,000.

I plan to live in the property, but i'd also like to invest in other properties at some stage (maybe using the equity in the property down the track).

Just wondering if you think this is a good idea? Or if you have other suggestions? Living at home with my parents is not really an option, i'm ready to move out.

I have also been thinking about possibly purchasing that property, living in it for 6 months (for the first home buyers grant), then using it as an investment property and renting closer to work.

Cheers.

 

[Bigtone]

Hi all,

Would just like your opinion as i'm thinking on purchasing my first property.

I'm a 24 year old single male on a $70,000 gross income.

I plan to save a $60,000 deposit (including the FHBG) in order to buy a 2 bedroom unit/townhouse/villa in Parramatta/North Parramatta for up to $350,000.

I plan to live in the property, but i'd also like to invest in other properties at some stage (maybe using the equity in the property down the track).

Just wondering if you think this is a good idea? Or if you have other suggestions? Living at home with my parents is not really an option, i'm ready to move out.

I have also been thinking about possibly purchasing that property, living in it for 6 months (for the first home buyers grant), then using it as an investment property and renting closer to work.

Cheers.

with those goals in mind in ur situation i would borrow at 95% plus lmi so that would be around a deposit of $15k plus the $7k fhog. Interest only loan with an offset.

Keeps back $55k to reduce interest until you decide to expand portfolio and eventually buy a home to live in.

means you can claim interest on max amount, keep a nice buffer for backup and have the flexibility to keep as investment when u move out and expand portfolio when u feel comfortable to do so. good luck

 

[Propertunity]

Yes, I think it is a good idea. Save a minimal deposit of 5% say. Buy the property free of stamp duty. Collect more free money from the FHBG. Stay the required 6 months and don't pay any of the loan amount down (just interest only) and then make it an investment property. (Max loan = max tax deductions)

Until you have a wife & kids, rent somewhere that suits you (near work, or whatever) as it will always be cheaper than owning your own home, and invest as much as you can with the money left over.

All the best.

 

[vbplease]

Hi Anthony,
Welcome to the forum. Sounds like you're a dilegent saver so you may want to consider the difference in LMI between a 5% & 10% deposit..

LMI calculator 1
LMI calculator 2

I think it's worth considering.

 

[anthonya]

Thanks everyone, appreciate the help.

After looking at this in detail, I think I will take your advice.

However, I think i'd better off with a 10% Deposit + LMI. Then put the rest into the offset account, interest only, as suggested.

Cheers.

 

[Peter_Tersteeg]

However, I think i'd better off with a 10% Deposit + LMI. Then put the rest into the offset account, interest only, as suggested.

Good thinking here. 95% lends are much easier to get now than they were a year ago, but they still make me nervous. More lenders are doing them at reasonable interest rates, but you still need to be squeeky clean in every way. If you can get away with a 90% lend you've got more options and a better deal in every way, especially the amount of mortgage insurance you pay.

If you do need a 95% loan, get a pre-approval first. I don't mind 95% loans if it's required, but there's a lot of good reasons why a 90% lend is preferable if the money's available.

 

[anthonya]

Thanks. Ill keep you all posted with how I go. Im thinking of holding off until after july to take advantage of the abolition of exit fees. Will give me more flexibility in the future.

 

[Ocean Architect]

I'm a big fan of property with future development potential, preferably something you can add townhouses to without demolishing the existing dwelling so as to keep cashflow up/avoid rental during construction. Opens the door to subdivisions etc.

One of my girlfriends parents turned their primary residence (3BR quite nice, big backyard plus pool) into a 4 dwelling residence with 3 townhouses out the back. Looks like melrose place if you ask me but advantageous in that you can add townhouse after townhouse with preapproved plans when you can afford to do so in a positively geared way before you go through the expense of subdivision.

As opposed to a lot of the other people here, I'm a bit more active in developing rather than holding and waiting for passive capital appreciation.

cheerios

 

[Melbournian]

that's crazy stuff add 3 townhouses. anytime u need to pull some cash u just put a townhouse on it and sell.

would have to find a pretty big piece of land in melbourne to do that.
But that's quite an interesting thought on developing - ocean.

 

[Ocean Architect]

that's crazy stuff add 3 townhouses. anytime u need to pull some cash u just put a townhouse on it and sell.

would have to find a pretty big piece of land in melbourne to do that.
But that's quite an interesting thought on developing - ocean.

This was in Adelaide, 2nd suburb out of the city, one of those long skinny blocks but still enough to fit a 3 BR house hard up against the front with this giant piece of land out the back. Her dad is quite sneaky though, and did very well for himself out of that