Fisrt Home Buyer Q's`

Hi,

I'm currently renting a town house in Bendigo, Vic with my partner and received a call from the PM advising me that the house is going to be put on the market soon and an appraisal will be done this coming Tuesday.. I'm pretty happy with this place and it is in a great area so I'm thinking about buying it ( for the right price )...

I'm pretty much starting from scratch, I've done a little research on property investing etc but never looked seriously into actually buying something... I would have to live in the place for at least 6months as I'd be eligible for the grant and then either buy again depending on how things are going..

What type of bank loan would suit this until I started leasing the property. Should I get a P&I loan to start with and then change over to a IO once I move tenants in? I'd only be able to go with 95% loan as this time, But would be able to pay repayments plus some with ease. And there are also a few little things I could do with the property to get the value up.

Should I notify the real estate that I may be interested in buying the property or just wait untill they come up with a figure?

What yearly fees are associated with town houses, Ie rates, body corp etc etc....

How does the THBG work, can I use that as part of my deposit?

And finally, How do I ensure the property is a good investement? It's pretty hard to get into rentals down here atm, I've hear people are paying above asking price just to get into something!
 
THBG? Town House Buyer's grant? If you mean FHBG then yes you can use it as a deposit :)

Let the RE know you're interested but don't show your card as to what your research shows its worth...may be an idea to go and get a pre-approval on your loan?

I'd personally go interest only on the loan...

As for reno's, I'm relatively inexperienced there, but there are heaps of threads about!

I'll let someone from Vic detail the rates/levies etc down that way!
 
remember you will have other costs on top of a deposit. LMI. loan application fees. Stamp duty. etc. still doable.
 
LMI is "depreciable" over 5 years or the term of the loan whichever is less if the property is an IP and the borrowings are for invest purposes.

ta

rolf
 
Hi,

I'm currently renting a town house in Bendigo, Vic with my partner and received a call from the PM advising me that the house is going to be put on the market soon and an appraisal will be done this coming Tuesday.. I'm pretty happy with this place and it is in a great area so I'm thinking about buying it ( for the right price )...

Fair enough.

I'm pretty much starting from scratch, I've done a little research on property investing etc but never looked seriously into actually buying something... I would have to live in the place for at least 6months as I'd be eligible for the grant and then either buy again depending on how things are going..

What type of bank loan would suit this until I started leasing the property. Should I get a P&I loan to start with and then change over to a IO once I move tenants in?

I would opt for an IO loan with 100% offset - you can park any additional cash you have in the offset account. This is usually the best structure for IPs - and if you intend to convert it into an IP in the future then it will save time setting it up properly from the start.

I'd only be able to go with 95% loan as this time, But would be able to pay repayments plus some with ease.
The banks will also want to see that you have the funds required to settle on the home - stamp duty, conveyancing, etc. Therefore, you'll need to show the lender the 5% deposit and evidence of funds to complete the transaction.

And there are also a few little things I could do with the property to get the value up.
Excellent. Make sure you get body corporate approval (if required).

Should I notify the real estate that I may be interested in buying the property or just wait untill they come up with a figure?
I would let them know. However, don't be the first to offer a price - do your due diligence.

What yearly fees are associated with town houses, Ie rates, body corp etc etc....
Yep, all of the above plus (and not restricted to townhouses) are insurance, PM fees, maintenance.

How does the THBG work, can I use that as part of my deposit?
Yes

And finally, How do I ensure the property is a good investement? It's pretty hard to get into rentals down here atm, I've hear people are paying above asking price just to get into something!

Do your research. The more knowledge you have, the more equipped you are to make better decisions, the less risky the purchase.

All the best with it!

Jamie
 
Hi all,

Let the RE know you're interested
:eek:

That is horrible advice!!

As the renter, you are in a good position to know all the strengths and weaknesses of the property, probably more so than the owner. During the open for inspections make sure the area around the carpet stains are really clean, so that certain features are highlighted, same for marks on the wall, any cracks, etc etc.

Hang around like a bad smell during any visits of potential buyers, making sure that they know you're really keen to get away from this dump and neighbourhood ;) .

The other alternative is to approach the owners directly and state your case with an offer, which means that if no agent is involved (assuming they haven't signed up ), that the price should be a little less for you and a little more for them.

bye
 
Thanks everyone, good advice... I certainly wont be busting my nut to keep the place clean in that instance.... And Were freinds with the neighbours who can always help out with day time noise sessions lol.....

As for valuing the property, is it a good idea for me to have a professional do this before I make an offer? It's fairly costly but could save me in the long run?.... Or will the lender help out with this by saying too much, no loan for you..?
 
"What type of bank loan would suit this until I started leasing the property. Should I get a P&I loan to start with and then change over to a IO once I move tenants in?

I would opt for an IO loan with 100% offset - you can park any additional cash you have in the offset account. This is usually the best structure for IPs - and if you intend to convert it into an IP in the future then it will save time setting it up properly from the start."

perfect advice imho
 
That is horrible advice!!
If you don't state your interest you may run the risk of the house being sold without you knowing.

If you're genuinely interested in purchasing the property, I would make it known to the REA. Ask them how much the vendor is asking, do your homework to work out what it's worth. Decide how much you are willing to pay for the property, start with an initial offer that leaves some room for further increases (but don't offer an unrealistically low-ball amount that will be disregarded and jeopardise your credibility).

Jamie
 
Hi all,

:eek:

That is horrible advice!!

Depends on the situation...I've had a mate who was renting a property he knew the owners were going to sell (he did adopt your advice of keeping the place messy:p) none the less - the agent sold it without any inspections having occurred and he never had a chance to make an offer!

That's the risk you take...you don't have to tell the agent at what price you're interested...just that you are ;)
 
I was under the impression that I had first choice given that I'm living in the property, or is this wrong?

Anyway, by messy I just mean leaving a few things here and there to make the place look a little less optimal..

Beside using RP data and looking at simmilar propertys for sale, what else can I do to further determine what the place is worth?
 
I was under the impression that I had first choice given that I'm living in the property, or is this wrong?

Dead wrong.

The property we are renting got put on the market rather suddenly. Had we known the owner was interesting in selling we would have made an offer.
 
Hi all,

he did adopt your advice of keeping the place messy

I may have been misunderstood here. I suggested keeping the place tidy so that obvious faults with the property stood out, well that is what I meant anyway.

Jus085 stated...

I'm thinking about buying it ( for the right price )...

not... "I'm desperately in love with it and must have it". Hence don't bother telling the REA about being keen on it, especially early on. Sure find out how much it is on sale for and do the sums, but don't tip the hand straight away. The odds are that the agent may ask you if your interested in purchasing, which is a different kettle of fish to approaching the agent.

bye
 
Might be a good idea to go to the bank to see if they will lend you at 95%.
You must have a price in mind if you have worked out 95% loan. Assuming you have added ALL the costs to buy?

Eg on $250K you'll need $11,000 stamp duty, $2,000 solicitor, LMI?? + your mortgage set up fees + the 5% ($12,000) So you have $30,000+ ?
Minus the FHG of course.


I'd ask questions of the agent in an offhand way "before" telling him you're interested. You may get more honest answers.

Eg-
You- Oh I wish I had the money to buy it as I like living here. How much do you think they'll take"?

Agent-$$$++

You- shock look on face "REALLY" Oh do you think they'll get THAT much?"

Look up on RE.com and say "I saw one in the paper (on net) similar to this for $$$).
 
Comparitive props are selling between 250-280 in this area, so I've based my 11% deposite on 280k.. Any more than this I wont be buying....

Good idea with questioning the RE but at the same time woulnd they turn around and think that if Im looking at prices on other places I may actually be interested and therefor realise I'm doing the sneaky thing and give me even less info than what they would If i were up front and honest?? Just a thought...
 
You are overestimating what the agent thinks.

Obviously if your place was for sale you'd have a look to see what it would sell for (well any curious person would).

Don't you think they have pre learned questions and answers to get their info from sellers and buyers?? I'll tell you. Yes they do. Is it all true. NNNOOOOO

Make up your own questions to suit yourself. If you want to buy property you need to learn to play the game.
 
Thanks TB, I'll give it a go!...

Also, what happens with settlement in the event that I buy already living in the property, can I request to have a really short one or will it still be 1-2months of paying rent before I switch over the the bank loan...
 
You'll have to negotiate the settlement date with the vendor....you could even try negotiating a "rent free" period from contract exchange until settlement - you can add pretty much anything into a contract :)
 
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