Getting a Loan at 20. Properties in NSW for $100k

I am almost 20 and would like to purchase a cheap investment property outside of Sydney (i'd like to buy in Sydney but I doubt I could afford it). My income is currently a little over $300/w but i'll be starting TAFE soon so I expect that to fall to $200/w.

I have made large capital gains in shares before and I currently have a net worth (if I sell my shares) of $20,000.

Will the banks loan me money for an investment property ?

Of course - in theory, if I buy a $100,000 property and rent covers many of the repayments I should easily be able to afford it and there is little risk to the bank if I keep my job. So therefore i'd like to know -

1) What are the odds of a bank lending me money ? (I'd like to know some more information before visiting a loan officer)
2) Will $100,000 purchase a reliable property which will not fall in value (my very limited experienced is guessing Blue Mountains).

Even after making approx $5,000 in gains in the sharemarket i'm still not very interested in shares or mutual funds. I'm interested in property and I think i'm finally ready to jump in the deep end and make a purchase. Please understand that i'm NOT interested in shares and the cheap property I am considering now will hopefully expand to a reasonable collection over the years.

My goals for this property is mainly for EXPERIENCE.

- I have to start somewhere, I want to go through the whole process of the purchase
- I'd like the property to at least break even so I can throw more income at it and hopefully pay it off some day (i'll own an entire property in my early 20s, woohoo :)
- I'm excited about the idea of a "free" cashflow from property

Thanks !
Hi Giraffe

never to young I feel.

Its perhaps not so much if, but how can you get a loan.

Some information that will help are:

1. Fulltime or partime work
2. How much dpeosit and where has it come from
3. WHat other costs or debts etc do you have
4. Rent ?
5. Car ?


You could speak to a "loans officer" so youll have an idea of what infor you need.

The issue is though if you go to bank A and they say no, you go bank b and they say no, and that will be the end of it, because you think it cant be done. Dont forget that although banks have similar rules in some ways, some are different enough. Its liekly that your best off to have chat with an independent broker that knows what the lenders will and wont do.

Thanks for the reply Rolf,

1. Fulltime or partime work

Yes part-time work while at TAFE, estimated income $2-300/w before tax.

2. How much dpeosit and where has it come from
$20,0000 - savings and capital gains.

3. WHat other costs or debts etc do you have
Hmm, haven't thought about this one, but i'm beginning to see where you're headed.

4. Rent ?

5. Car ?

Should I just check for 'mortgage broker' in the Yellow Pages ?
I wouldn't use the Yellow Pages - just get Rolf to do the business for you. He is a great broker with a lot of experience and credibility.

Rolf is spot on. So many people see a couple of traditional banks then give up when they say no. There is so much variation in the niches they aim for that you should find a lender to fit.

Take a look at some of the areas outside Newcastle for properties under $100K.

G'day Giraffe,

one word of advice........Definately, see a finance broker!!!!

18 months ago, I was having a heap of trouble increasing borrowings from the traditional bank lender I had been with for years.

Serviceability and too rent reliant were issues that the bank kept throwing up, I had hit this wall and it seemed impregnable.

I found one of those properties that one just has to buy at any cost, and basically the deal that the bank offered was unworkable for me......on some off the cuff advice from a friend, I went to a finance broker that I had known for years but never availed myself of his services. approved within 48 hours and property was mine.

Glad to say, I haven't been back to this bank since then.

Nowadays, I find a property and go straight to the broker, and I ask him, NOT...if this can be best can it be financed.......and the best part is,...HE FILLS OUT ALL THE PAPERWORK!

Maybe I should have done this years ago....

regards and go and see a broker now!
Thanks for the tip Jakk ..

I've have never seen a finance broker myself or know what one is .. should I check the yellow pages for 'finance broker' ? I'm assuming the service is free and they're only to advise and collect commission ?

Don't stick your neck out with unknown quantities.

There's pirates out there. There's also good people.

Without a personal recommendation, I would not pick anyone from the yellow pages. I picked a financial advisor from the YP some years ago- the story of the $53,000 I had topay the ATO as a result is documented elsewhere in the forum.

Do what Simon suggests, and talk to Rolf, or someone he recommends.

Many brokers (or even bankers) do not know about investment properties- it's really important for you to find out about people who understand what you are after.
Thanks again -

I've met Rolf and don't want to pester the guy with my probably-not-going-to-happen questions :) I mean - on my income - seriously I doubt it :)
Dear Giraffe,

Making something happen begins in the mind first.

You have to visualise it before you achieve it. Otherwise you have failed before you have started.

"If you think you can you can. If you think you can't you can't."

There is ALWAYS a way to get started. It may take time, and I am an advocate for long-term plans and not "get rich quick schemes" however decide what you want to do and go and get it.

You will surprise yourself.


You CAN make it happen. I started with only 20k with a low income. You don't even need to visualise, just walk into a bank and ask (or a finance broker). Remember however, about 5% of the value of the property will go in legals and stamp duty. So your leverage isn't 5 times but more like 4 times unless you can get the lender to hand over more than 80% of the value in which case you're up for mortgage insurance. So with 20k you can buy an 80k house easily but more than that then you have to start being creative!