How do I capitalise on my current situation?

Hi All,
As a true clueless beginner to what is going on I seek all your much needed advice to hopefully to get me on my way in the property game.

I am a careless 23 year old with a full time job, that loves a night out on the town every Saturday night. I have two loving parents who have just placed a very tight noose around my neck. Which brings me to my current predicament. My father owns a rather large block of land which he has now sold most of except 1. He had mentioned to me earlier he wanted to get me started and on my way with life and with the first home owners grant last year at $21k it was all to easy to see his plan unfold.

He had signed a block of land over to me and told me to get on my way, I only have until November. Being as stupid as I was I went to look at display homes by Metricon. Im sure anyone will know once they walk into one of them that the 100’s of down lights, impeccable timber decking and alfresco living that it is impossible to resist. So I decided to build with Metricon despite the fact that they probable don’t build 80% of what you see in the display homes including timber decks etc. Now with my parents checking up on me was quite happy with the design I chose BUT!!! That thought it was in their own right to make their alterations including an extra bedroom and extra high ceilings which brought the bill to $275,000 to build the house.

5 months later I just received the keys to my 5 bedroom, 2 bathroom, double garage house. With only a bed, tv and car to my name I am looking to move in once I figure out landscaping, fencing, furniture etc AND decided whether I should build this just quoted timber deck for $15,000.
I guess it is now D-Day and last night have decided to screw my head on straight and start doing something with my life. I am looking to best capitalise on the situation. With my fulltime job and no other commitments Ive calculated with bills etc I can manage paying off my mortgage fine on my own. However, II will get 3 more house mates in to help me with my mortgage payments to take the load off a bit too.

My question is, what do I do next to capitalise on the situation? I am not obligated to pay back my father but intend to give him $300,000 when I can or decided to sell the place. I really want to get started in property investment, so what should I do? Do I sell the house and look for another property perhaps? Keep it and loan against the equity? Keep in mind I probable will only have enough money to buy a chicken wrap at McDonalds after I finish furnishing and finishing off the place.
Any advice is greatly appreciated
You are in a very lucky situation. Your father is trying to put you on the straight and narrow. Why do you want to sell? Does the house cost you most of your pay? If youput some others in to help with the repayments, make sure that everyone knows their obligations and rules as it could become either the best move you could make or your worst nightmare.
In what suburb is the property in and what is the likelihood of the property renting if you move out because it might be a case of renting the property and still living at home. You might end up saing and buying another property to live in or as an IP.
congratulations on your first purchase. if you keep your head on straight, in years to come, you will greatly bless your daddy for his wisdom and generosity.

firstly, dispell thoughts of selling. you've just paid out heaps in fees, charges, stamp duty, interest etc. keep the thing as it will only increase in value over time and it is the easiest house purchase you'll probably ever make.

secondly, and take this one very seriously. DO NOT RENT TO MATES. whilst it may be cool etc, you are now in the business of renting rooms. you want people who will pay ALL THE TIME, not make excuses and push you about because you are a mate. also, you want people who will keep your furniture, carpet etc clean. i take it your mum won't be around to do it......?

are you in a university area? overseas students pay handsomely and girls are very good tenants. not a lot of interaction though, which is fine unless you want to talk etc.

my son is working on building a four bedder and will rent to 3 other young professionals or overseas students. he shouldn't have to contribute any costs himself.

he'll save for a few months and do it all again......

best of luck with your journey. you're very blessed to start so young!
by the way, be careful of the $15,000 deck. look up the meaning of overcapitalisation and then do some sums to see how long it will take you to pay for...... scary that one.

a grand or two spent on paving may be more sensible.
Thank you tigers63 and graisme for your advice, I want to make the most of the situation and just wasnt sure what I should do. With me not fussy whether I live in this 5 bedroom house or a 1 bedroom flat, just wanted to capitalise on this as much as I can to really start me off in proeprty investment.

The repayments arent to bad to my pay, just a big adjustment for me from no mortgage and bills to a complete turn around. The suburb is in the Southside of Brisbane, QLD so there is overseas students galore so hopefully there will be no problem with students to rent rooms. Just hopeing to get my next house as soon as I can, I know its a bad trait in property investment but I am a very impatient person.

P.S I just had a second look at my backyard and maybe I will have to go with paving or tileing but a deck is irresistable but $15,000 is ridiculous. That just shows you how clueless I am, I imagined it to be $5,000.
You're a very fortunate young man to be given such a fantastic start in life by your father (and mother no doubt). I hope you appreciate in the years to come what a magnaminous gesture it was.

Soak it all up Alex, have your learning cap on and ask your father intelligent questions after you've thought out your overall strategy.

The act of living in a house and renting rooms to reliable paying housemates is a brilliant first step into the lucrative world of Landlording. Any young chap with a 5x2 and helped in the mortgage payments, with a considerable tax deduction to boot is very blessed indeed.

Have you shouted your old man a nosh up lunch down the pub and a few beers in recognition of his generous nature ??
With all my years of buying, selling, broking, foruming etc etc my advice is simple.

Don't ever sell this property or any others if you don't have to.

Get the small details finished. Shop around for a deck and landscaping etc. Don't go too fancy but then again make sure it suits the home and the suburb ie don't go too cheap and nasty.

Make your repayments. If you are a good saver then make it an IO loan and save in an offset account. If you aren't a good saver then just pay down the loan P&I.

When you are ready go and buy another place. Borrow against this one for a 20% deposit and then get an 80% loan to buy it. Don't XColl.

Now you have a home and an IP.

Do it again when you are ready.


You will be a rich man if you can just follow this course. I wish I had someone tell me this stuff at your age and make me listen - at 23 I knew everything - don't make that mistake :)
If I understand correctly, you will need to live in the place for 6 months to keep your FHOG, and 12 months for any stamp duty concessions (although on a new build, probably no stamp duty? - dunno, never built!)

But if you then intend to move out and rent it as a whole, why bother filling it with furniture? I know it sounds a bit weird to have a 5 BR house with little to no furniture, but unless you rent it furnished (a potentially rewarding, but more restrictive market) what are you going to do with all that furniture? Especially if it's only for 6/12 months.

Even if you have housemates move in, they are likely to bring their own stuff, are they not?

BTW, congratulations! What a great position to be in. FWIW, I agree with others; keep it as long as you can, borrow against it, etc.
Congrats on beginning your investing at 23!

Don't worry about furniture - anyway you've got a bed, that's a wonderful start. When I first left home I bought a 2nd hand fry pan, my only kitchen cooking vessel, and I even boiled water in it for a cuppa! Twas fun. My telly was given to me by my sister's mother-in-law, and it was colour too - yellow only.

My flat-mate brought along his possessions, 1 bean bag. We shared all our possessions and had a wonderful time with loads of visitors and parties. Anyway I ended up marrying that flatmate and now we have more than just a beanbag, frypan, and yellow-colour telly.

Your yellow telly reminded me of the time about six years ago when a visitor (one of our tenants actually) called in to pay his rent (not the usual, and the only time he had been in our house). He was a nice chap and we asked him in for a coffee.

We were having a chat and he asked us was our telly on the way out? We had not noticed because it was so gradual, but the newsreader's head was elongated and close to hitting the top of our screen (picture Marge Simpson's hair and you are getting the idea).

We still thought he was seeing things as none of us had noticed this gradual lengthening of people's heads. I remember calling my mother and getting her to put her telly on the same channel, and we were comparing how much air space was between the people's heads and the top of the screen.

As the weeks wore on, it became obvious that the people in our telly were being sucked upwards by some weird alien force, and we got a new telly.

If that chap had not called in, we would probably still not have noticed until someone's head totally disappeared :eek:.

Obviously, our powers of observation were slightly askew.
Our yellow-telly was a point of conversation and great humour!

We invited our friends around for a house-warming dress-up soiree and told 'em we had a pool ! Well we did, we blew up a kids wading pool, filled it with ice for the drinks. Great party, tricked everyone. Aaah those were the days hey?
avoid the deck - plants make a garden, not a glossy magazine quality deck.

deck's don't change, plants do and they're cheaper.

my advice? stick with it. my second mortgage was $272k and it seemed like a nightmare to pay off - 5 years later the rent covers the existing mortgage payments. think about that for a bit.
Our yellow-telly was a point of conversation and great humour!

We invited our friends around for a house-warming dress-up soiree and told 'em we had a pool ! Well we did, we blew up a kids wading pool, filled it with ice for the drinks. Great party, tricked everyone. Aaah those were the days hey?

haha We had a pool party. The front yard was on a slope so we got a ton of soil delivered and made a semi circle wall on the lower end. Covered it (and up the hill) with plastic and filled it with lux flakes whipped in water. As people got drunker they dived in and ended up sliding over the top and into the garden.
Best party EVER. At 5am the next morning the neighbour across the road started his lawn mover and just left it running for an hour. We were young and used to copious amounts of alcohol, we didn't care.