New to property investment - Where and How?

[alexlee]

and read the discussions between Alexlee and Yeildmatters. They are from opposite sides of the spectrum which I find enlightening.

The weirdest thing about YM and my discussions is that I end up looking like the bull, while in most other posts I come across as the bear. I think of myself as a bull for the long term. A dose of caution in the short term is good, though: that's what will allow you to survive through the inevitable downmarkets.
Alex

 

[Jayro]

Stumunro I know the area VERY well. I realise some memebers of this forum do invest out there and do well and will continue to do well there over the yrs. Its not the area for me to invest in as it doesnt get the ticks it needs on my check list lets say.

Jayro

 

[stumunro]

Stumunro I know the area VERY well. I realise some memebers of this forum do invest out there and do well and will continue to do well there over the yrs. Its not the area for me to invest in as it doesnt get the ticks it needs on my check list lets say.

Jayro

Sorry for the assumption I guess I come across too many people from the north shore who don't even know that people live in Blacktown Let alone that would invest there.

P.s it's not my cup of tea either

 

[Amanda Huggnkis]

reading this thread prompted me to do a search on places for $200K tops in western sinney. Auburn came up first_http://www.domain.com.au/Public/SearchResults.aspx?mode=buy&state=NSW&areas=Blue+Mountains+%26+Surrounds%2cParramatta%2cWestern+Sydney&to=200000&page=1
There are places like bed sits for $100K returning $160 per week. What is wrong with this picture? What am I not getting? The returns seem good? I have to move to sinney with work and was looking at renting for $350per week but at this rate buying is cheaper than renting and I could buy a place then when i leave the rat race rent out? What do you think?
This question is a natural chain of thought from this thread but please feel free to direct me to the correct area or move.

 

[willair]

23. When u consider investment, what are the key factors that you look for?

IMHO..
Welcome to the Forums,spend some time reading as much as you can,do a search on the area's you intend to invest ,something will come up..

With your question,what I look for in property is only three items,Price,Location,Land Area and what will happen in the street or Local area over the next 5 years,the house is not always important as long as you can rent the property from day one,sounds simple but it takes a lot of work to find those properties..

You could always study the way the ASX http://www.asx.com.au/ works and take on both at the same time..IMHO....willair..

 

[The Y-man]

Well my savings are not much .... around $8000. However I am just wondering what are the places where I should invest.

Maybe you need to invest in yourself first.

You say $8,000 is not much - have you investigated why you have this amount, and what can be done about it?

Cheers,

The Y-man

 

[Kennethkohsg]

Dear Life Is Wealth,

1. What are your own investing goals/objectives and investing time frame that you are presently having in mind?

2. Why do you want to consider investing in land in Melbourne, in the first place? What are its pros and cons, as far as you are concerned?

3. Perhaps, your answers to these 2 questions will help us better understand your own investing needs and thinking so that we are able to point you to the required direction where neccessary, please.

4. Thank you.

Cheers,
Kenneth KOH

Cheers,
Kenneth KOH

 

[Skye]

Hello, Life is Wealth,
I can tell you about Creswick, as I live there. Location is good..between Daylesford and Ballarat. Prices are still considerably cheaper than Daylesford, which is on par with Melb. prices.
The town has had natural gas for approx. 1 year. There is new activity in the township owing to the "Forest Resort"-Novetel Hotel (Forest resort.com.au) being constructed here. The Hotel is worth 250 mil. and is expected to create over 200 jobs for the region. The Hotel is due for completion in April '08 and is ahead of target.
Creswick is also in the news at the moment owing to our resident arsonist...still not caught. And costing me sleep!
To summarize, I feel Creswick will soon become as popular a tourist destination as Daylesford.
Hope this helps,
Skye.

 

[sue78]

You are really young so if it doesn't go to plan...it's not gonna kill you.

I am a huge fan of land and build and I did exactly the same as you. I bought 3 blocks of land with less savings than you and no finance organised. I sold on sold one on settlement. Made a lot of money with no money and went to develop the other two and did very well.

I know you come to the forum for encouragement but trust in yourself. It's good to hear others opinion but do whatever you want to do.

I may sound arrogant but I just do things my way, afterall it's my money. I don't read a lot of books. One or two is sufficient.

Even in Brissy now...it's only land that you can make $100k CG within 3 mths.

With the instant capital growth on completion of building, you can capitalize on the interest and will still be better off.

 

[MelbEngineer]

I like Pakenham out of the Suburbs listed. Mainly because it is a newish growing area. They have a new highway there... not sure if that is good or bad for Pakenham as it bypasses it. Anyway it's also closer to Melbourne than the other areas I belive.

 

[boods99]

You are really young so if it doesn't go to plan...it's not gonna kill you.

I am a huge fan of land and build and I did exactly the same as you. I bought 3 blocks of land with less savings than you and no finance organised. I sold on sold one on settlement. Made a lot of money with no money and went to develop the other two and did very well.

I know you come to the forum for encouragement but trust in yourself. It's good to hear others opinion but do whatever you want to do.

I may sound arrogant but I just do things my way, afterall it's my money. I don't read a lot of books. One or two is sufficient.

Even in Brissy now...it's only land that you can make $100k CG within 3 mths.

With the instant capital growth on completion of building, you can capitalize on the interest and will still be better off.

sue78...
can you share with us where you can make this sort of return?
...Im sure there are lots here that would like to make that sort of CG in such a short period.
Boods

 

[sue78]

my block of land actually took about 8 mths to reach that sum. I have another block which I bought in Oct and is now worth about $50 to $60k more.

But there was a post recently from Ruroshin, a block of land in Calamvale was auctioned off $100k more than he paid for his within 3 mths.

But there were so many sign in the past 2 yrs for land that this was expected. A block of dub-divided land in Robertson 600sqm listed for over $600k 1.5 to 2 yrs ago.

just look for my previous posts.

 

[want2bewealthy]

I dont think that guys coming back...

 

[DreamzUnlimited]

Hi guyz :

Thanks heaps for your reply. It was really nice to read ur replies. In the mean time I am reading some articles etc on Property Investment. However right now .... I am considering two places for vacant land investment ...

Warragul and Pakenham.

Apart from that I want to know if someone out here has invested in block of land in any part of victoria recently. if so where?

Also in terms of buying books for Property investment, whats the best place/shop? do they consider the current scenario, discuss about future boom areas etc?

I am still doing my homework and exlporing opportunities. discussions of experienced ppl in this forum are really good for me

Cheers!

 

[alexlee]

LIW, have you done the cashflow analysis on the land? How long will your savings last in terms of paying the interest, and what do you plan on doing when the savings run out?
Alex

 

[DreamzUnlimited]

well what I plan actually to pay off the first amount from my savings and then pay off the mortage( principal + interest) every month from my salary.

Few more queries :

1. If I buy a block of land, can I claim the interest during tax claim?

2. Also I think I have to pay land tax. How much is that approx for a 500-700 square metre?

3. Regarding the loan, will it be an investment loan or a house loan? I just want to buy this land as investment,

Cheers!

 

[alexlee]

1. If I buy a block of land, can I claim the interest during tax claim?

Probably not.

2. Also I think I have to pay land tax. How much is that approx for a 500-700 square metre?

Depends on where it is. Not all land is valued the same, for obvious reasons.

3. Regarding the loan, will it be an investment loan or a house loan? I just want to buy this land as investment,

Talk to a mortgage broker.
Alex

 

[steveadl]

Not to say don't do it - but definitely have a good think and do more research before you buy land for your first investment property.

The interest won't be tax deductible unless you are planning to build within 2yrs from memory (and you may need to prove this if asked).

Just make sure you realise - if it won't be tax deductible, then you need the value to go up considerably just for you to break even:

$100k block of land (for ease of figures assume a 100% lend)

Interest @ 8%pa = $8k, + council/land tax etc. of only say $300 (probably way too little)

Therefore you need the block to increase in value by 8.3%pa just for you to break even. Not necessarily an easy task, especially if you are buying on outskirts of the city where the land is not as scarce.

You should do some serious research before you take this route, and what other alternatives are open to you.

 

[DreamzUnlimited]

Well after reading this thread and other threads, I am also considering to invest in a house rather than a land as my first IP. I am seeing one Mortgage Broker within this week to judge how much maximum I can borrow and then look for a house at that price.

In the mean time I would love to see suggestion/feedbacks from other experienced eg. if it's a house then which suburb of Melbourne/Victoria, whether it shud b a minimum of 2 bedrooms etc.

Thanks and regards.

 

[alexlee]

Well after reading this thread and other threads, I am also considering to invest in a house rather than a land as my first IP. I am seeing one Mortgage Broker within this week to judge how much maximum I can borrow and then look for a house at that price.

You also need to look at how much you can afford to pay, taking into account potential interest rate rises, repairs, etc. Just because the bank will lend you $x doesn't mean you can afford it.
Alex