New to this... Where to buy.

M

MC.

Hi All,

Stumbled across this site today an have been reading it throughout the day. A wealth of information I must say.

I would love some advice or at least a 'what you would do' if you put yourself in my situation.

I'm currently living at home with the intention of purchasing my first IP. I've been extremely indecisive about where/when to buy over the past few years and it's getting to the point where I feel I just have to make the plunge and buy something/anything. But I'm really struggling. Even though I view it as an IP I still get a bit picky about choosing somewhere I'd potentially like to live, nice place etc etc. I know I should just ignore all this and buy something with good growth potential but again I don't really know enough about it and it's slowly driving me crazy. Then I don't know if I should focus on a house/potentially big block or just get a unit with the intention of buying another one every few years.

I will be purchasing this IP alone, with the intention of renting another place of residence with my partner within 6-12 months. I guess with the intention of buying our place of residence within 3-5 years.

I currently have ~$150k saved + bank loan, and earn what would be best described as a median wage. What/where should I be looking?

I've looked around the north west (Fawkner) for a house, but then every now and then I start thinking perhaps a unit/apartment around collingwood etc might be the way to go. Or I could just buy a house fairly cheap in the outer SE suburbs but then I don't think the growth will be there as much. And it's not an area i'd be happy to live in...

ARGHHH... As you can see when I start thinking about one area I switch to another completely different. Surely someone has been in a similar situation.

Any advice on where to start/focus on would be great. Doesn't even have to be suggestions on where to buy but the best way to start this adventure. I need to change my focus to finally get my foot in the market I believe.

Cheers,

(I hope this thread isn't too ranty/broad/pointless.... If so please feel free to get rid of it. Wasn't sure if it was suitable in the 'where to buy' forum)
 
When reading Somersoft it is important to understand that most perma-bulls here are in the top tax bracket. Without the tax breaks they may not be RE. I don't KNOW that of course but it is logical to me.

If you are not a high earner, go back and read again. There is a recent poll which confirms the high average incomes so read that too.
 
Thanks for the tip.

I'm not high income by any stretch of the imagination. It's somewhere around ~$65-70k before Super... I guess roughly the average Australian wage.

I totally understand that a lot of the posters here would be very high income earners with their portfolio. But I figure everyone has to start somewhere and some of those perma-bulls might be able to share some of their starting out knowledge with me :).

Cheers,
 
Hi MC,


It's always a difficult decision working out where to buy. You have many options - and I guess this is the confusing part. For your first investment, I'd be inclined to buy a neutral property. (ie a property that pays for itself).

You can do this by using some of your $150,000 (ie the remainder of your money after allowing for stamping and buying costs) into an offset account and buying with as high a yield as you can and pay it down as quickly as you can to establish an equity base.

Perhaps a property worth $350,000 would be an affordable figure to aim for. For this type of money you could purchase:

1) A one bedroom flat in a suburb closer to the city

2) A two bedroom flat in a suburb a little further out.

3) A unit in an outer ring suburb (ie past the 12 km zone - probably closer to the 20 km mark)

4) A house in a middle ring Western suburb or outlying Eastern Suburb.


I'd look for transport links (road, rail - tram, train), ammenity (parks, hospitals, schools, entertainment precincts etc).


Regards Jason.
 
MC, the reason all properties look the same to you is because you have not clearly defined a chosen investment strategy have you??

You see its your chosen investment strategy that dictates your property selection criteria.

If you dont know what you are looking for therein lies the confusion and frustration of ever knowing if/when you have found it. With out one all properties will look the same!

Its the number one common trap for beginners.

I hope this provides some food for thought.
 
I really do appreciate all your replies and it has definitely given me some food for thought.

It seems I have a lot more reading to do before making a decision on the type of property is right for me as an investment.

Really look forward to spending more time on these forums, and thanks for the welcoming nature of your replies :)
 
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