Looking to buy first property (Melbourne)

[Mezza]

Hi property investor experts!

I'm new to the forums (found out about this through another poster on a different forum - thanks Lynchy ) and have been having some good reading the last few days.

Just as a bit of background - I'm currently renting a place with a friend in Melbourne's West (close to Sunshine/Albion) but will be evicted at the end of the year as the landlord has some relatives wanting to move in. Instead of looking for another rental property, I'm considering buying my first property (both as a residence but with the intention to share living with a few renters (my younger sister and her partner are wanting to move to Melbourne next year and have expressed an interest in moving in with me if I do buy my own place).

As this is my first time, I'm a bit unsure where to start and was looking for any assistance/advice/comments that might help a first time buyer and things to consider. I'm ideally looking for a place also somewhere in western Melbourne but other than that, I haven't done anything or spoken to anyone.

At this stage, I think my ideal budget might be around the $300-350k mark though I'm yet to do any formal budgeting or speak to a financial planner. I'm working full time professionally in the CBD and have no current debt (have paid off my uni fees).

In the meantime, I'll keep trawling the forum for more info or looking for similar threads to this one but if anyone has any suggestions or advice they'd like to share, I'd greatly appreciate it!

Cheers

 

[alexlee]

At this stage, I think my ideal budget might be around the $300-350k mark though I'm yet to do any formal budgeting or speak to a financial planner. I'm working full time professionally in the CBD and have no current debt (have paid off my uni fees).

You?ll need a mortgage broker, not a financial planner. You also need to do a budget do know how much you can afford to pay.

This is your first step. Talk to a mortgage broker to assess how much you can borrow, then compare that to your own budget to see if you can afford the payments. Right now the 300-350k is meaningless.

 

[Mezza]

You?ll need a mortgage broker, not a financial planner. You also need to do a budget do know how much you can afford to pay.

This is your first step. Talk to a mortgage broker to assess how much you can borrow, then compare that to your own budget to see if you can afford the payments. Right now the 300-350k is meaningless.

Thanks alexlee - regarding mortgages, are you able to negotiate the payments with the broker or are the repayments determined and set by the bank and the amount you borrow? (sorry, hope that's not a dumb question - I have little to no knowledge in the world of property buying).

I'll try and have a go creating a budget when I have some free time - is there anything special I need to do here or do I just need to assess basically how much spare money I'll have and then try and figure out how much I can/would be comfortable or willing to pay for payments?

 

[alexlee]

regarding mortgages, are you able to negotiate the payments with the broker or are the repayments determined and set by the bank and the amount you borrow? (sorry, hope that's not a dumb question - I have little to no knowledge in the world of property buying).

The repayments will be a combination of the loan amount, the interest rate and whether it?s interest only or principal and interest (the last is very important: have a read about IO and P&I on the forum, especially if you first reaction is ?but I don?t like debt and want to pay off the loan ASAP??)
A lot of the questions you have will have been discussed in detail before. Read them first.

I'll try and have a go creating a budget when I have some free time - is there anything special I need to do here or do I just need to assess basically how much spare money I'll have and then try and figure out how much I can/would be comfortable or willing to pay for payments?

A good way is to write down everything that comes in and out over a 3 month period. Net salary, then every outlay. Coffee, mobile bill, utilities, going out, whatever.
This doubles as a way for you to analyse your expenses and see what you can cut.

Then, think longer term. What do you plan on doing after buying this property? Do you plan on buying more? If not, how are you going to fund your retirement?

 

[Colin Rice]

In the meantime, I'll keep trawling the forum for more info or looking for similar threads to this one but if anyone has any suggestions or advice they'd like to share, I'd greatly appreciate it!Cheers

First port of call would be a broker. Speak to PT Bear who is based in Melbourne and posts on here regularly. He will look after you and guide you through the property maze.

 

[KoopaTroopa]

As everyone else has said, definitely talk to a broker. You don't "need" a financial planner yet, IMO.

$300-350k

For that money since you're already familiar with the area you are in, you could easily buy a 1-bed unit in excellent condition in that price range.

You could get a fixer-upper 2-bed/3-bed house if you look hard enough as well.

Albion / Sunshine(West/North/Central) / Braybrook are areas where that budget will buy you anywhere from a 1-bed unit to a 3-bed house, depending on condition. I've seen countless "ugly" mega-rundown houses 3-bed (and 2-bed) on 500sqm+ sell for $380-400k. If you lower the land content you can get them for under $350k.

There are plenty of 2-bed units for under $350k in those areas.

You've got a lot options if you look in those areas but you'll have to make compromises the larger/more-space you look for.

 

[Mezza]

The repayments will be a combination of the loan amount, the interest rate and whether it?s interest only or principal and interest (the last is very important: have a read about IO and P&I on the forum, especially if you first reaction is ?but I don?t like debt and want to pay off the loan ASAP??)
A lot of the questions you have will have been discussed in detail before. Read them first.



A good way is to write down everything that comes in and out over a 3 month period. Net salary, then every outlay. Coffee, mobile bill, utilities, going out, whatever.
This doubles as a way for you to analyse your expenses and see what you can cut.

Then, think longer term. What do you plan on doing after buying this property? Do you plan on buying more? If not, how are you going to fund your retirement?

Thanks a bunch alexlee - that sounds like a good way to go about it. Might give that budget plan a go in the coming days if I can find the time. Will also have a read on the forum for IO and P&I to try and familiarise myself with the terms.

 

[alexlee]

Might give that budget plan a go in the coming days if I can find the time.

Just remember, good money management is one of the most important skills you'll need.

To put it more bluntly: find the time.

 

[Mezza]

As everyone else has said, definitely talk to a broker. You don't "need" a financial planner yet, IMO.

$300-350k

For that money since you're already familiar with the area you are in, you could easily buy a 1-bed unit in excellent condition in that price range.

You could get a fixer-upper 2-bed/3-bed house if you look hard enough as well.

Albion / Sunshine(West/North/Central) / Braybrook are areas where that budget will buy you anywhere from a 1-bed unit to a 3-bed house, depending on condition. I've seen countless "ugly" mega-rundown houses 3-bed (and 2-bed) on 500sqm+ sell for $380-400k. If you lower the land content you can get them for under $350k.

There are plenty of 2-bed units for under $350k in those areas.

You've got a lot options if you look in those areas but you'll have to make compromises the larger/more-space you look for.

Thanks KoopaTroopa - sounds like those western suburbs have a fair bit of variety in property types for the budget I was thinking (though will need to do some actual budgeting first!).