New Investor in Sydney Market

[Reach]

Hi All,

I am a long time reader, but don’t normally post, as I haven’t been in a position to invest, until now.

I have recently changed employment status and have a contract which nets $180,000 pa. My contract runs till March. I am looking at my investment options, as obviously I would like to utilise this income for maximum advantage whilst I have it.

I have relatively low bills, and am eligible for the FHOG.

My initial thoughts were as follows:-

Purchase a property (I’m Sydney based) for around $500k, to hold long term. I would then live in it for 6 months, in order to claim the grant. I could then rent an apartment (im single for now )and use this property to negatively gear, in order to take advantage of the tax benefits.

I have a deposit of 35k at this time.

My main questions are:-

What does everyone think of this strategy?

What other strategies exist? What other options should I consider in my position?

Obviously my cash flow is quite good, and I would like to invest smartly. I would like to reduce the tax I pay if possible to make the most of my income.


FYI…If I were to come off contract I could expect a full time position around $100k.

Thanks!

 

[MichaelW]

Reach,

This is by no means gospel, but in your position I'd ferret away as much of that spare cash as possible until the contract runs out and then re-assess your situation. On a $500K place in Sydney you'd be looking for about $100K down on an 80% lend. So your $35K won't get you there. You can go lo doc but typically that makes the rate more expensive. You can pay for LMI but not sure that would stretch you to a 95% lend.

And the other issue is your ongoing servicability. The banks are pretty good with income, but I'm not sure how they'd go lending when you're contracted. Probably all OK, but from an ongoing servicability perspective in your own mind, I'd want a salaried position or a stable long-term contract.

So, for now, well done! And save as much of that as you can so that you'll be well placed to buy into the market in 9 months time. And don't worry, you won't have missed the boat by then in Sydney. It will probably still be just finding its feet again.

Cheers,
Michael.

 

[sfadous]

Help is on the way

Hi Reach,

The last blogger was correct, you would need at least 10% deposit unless you had equity in another property.
My company sells brand new property all over Sydney, we refer to ourselves as buyers agents.
If you want some general questions answered please email [email protected] as I have a hard time navigating this site.

Good luck.

 

[alexlee]

Hi Reach,

The last blogger was correct, you would need at least 10% deposit unless you had equity in another property.
My company sells brand new property all over Sydney, we refer to ourselves as buyers agents.
If you want some general questions answered please email [email protected] as I have a hard time navigating this site.

Good luck.

Simon, we usually prefer that you show that you know what you're talking about first before even trying to solicit customers.
Alex

 

[Twitch]

My company sells brand new property all over Sydney, we refer to ourselves as buyers agents.

I refer to myself as Twitch, King of the Universe. Unfortunately just saying it doesn't make it true

 

[geoffw]

Simon, we usually prefer that you show that you know what you're talking about first before even trying to solicit customers.

What Alex said.

 

[Jacque]

Hi Reach,

The last blogger was correct, you would need at least 10% deposit unless you had equity in another property.
My company sells brand new property all over Sydney, we refer to ourselves as buyers agents.
If you want some general questions answered please email [email protected] as I have a hard time navigating this site.

Good luck.

Oh dear... have you stumbled across the wrong forum for obvious soliciting

And your claim to be a buyers agent when you sell property rings hollow and smacks of conflict of interest. You either represent the vendor (in your case the developer/builder) or the purchaser. It's pretty simple really.