PPR or investment for first property

[slopshua]

Hi all, new to the forum and first post.

I'm interested in getting some opinions from the forum on my and my partners current situation. Obviously on a public forum everything that's said will be taken with a grain of salt and all due diligence will be done before any decisions are made but we are very new to the property game and I'd like to know what you think.

My partner and I are moving to Cairns next year for work, both have full-time employment. We have saved a deposit over the last year or so and will be purchasing our first property within the next few months. We are in our mid 20's and our income will continue to improve over the coming years.

Our dilemma is this, do we buy a PPR in Cairns and use manufactured growth to make a quick buck selling after 12 months or are we better off investing elsewhere and renting in Cairns?

Factors that may affect our decision are:
- one of us has plenty of spare time during the working week. On average only working 2-3 days per week. ie. plenty of time to work on a property
- we are both very handy and capable of basic self renovating.
- we don't plan on being in Cairns for more than 12 months.

Our property strategy will eventually be buy and hold and we hope to accumulate at least 1 property per year after our first purchase. We've done a lot of reading and learning in recent months and have decided cash flow positive properties (perhaps at the expense of capital growth) are what we will structure out portfolio around in order to create enough passive income for one of us to focus specifically on property on a full time basis.

If anyone has any thoughts on the above we'd greatly appreciate your opinion.

Cheers!

 

[Brady]

If you weren't moving to Cairns to live for 12 months would you purchase there? If no is the answer then why would you look to buy there. It's 12months you've already stated you're looking long term buy and hold.

If you do proceed to buy up there I would ensure you borrow max and keep funds in offset for later purchase.

 

[Redom]

Hi all, new to the forum and first post.

I'm interested in getting some opinions from the forum on my and my partners current situation. Obviously on a public forum everything that's said will be taken with a grain of salt and all due diligence will be done before any decisions are made but we are very new to the property game and I'd like to know what you think.

My partner and I are moving to Cairns next year for work, both have full-time employment. We have saved a deposit over the last year or so and will be purchasing our first property within the next few months. We are in our mid 20's and our income will continue to improve over the coming years.

Our dilemma is this, do we buy a PPR in Cairns and use manufactured growth to make a quick buck selling after 12 months or are we better off investing elsewhere and renting in Cairns?

Factors that may affect our decision are:
- one of us has plenty of spare time during the working week. On average only working 2-3 days per week. ie. plenty of time to work on a property
- we are both very handy and capable of basic self renovating.
- we don't plan on being in Cairns for more than 12 months.

Our property strategy will eventually be buy and hold and we hope to accumulate at least 1 property per year after our first purchase. We've done a lot of reading and learning in recent months and have decided cash flow positive properties (perhaps at the expense of capital growth) are what we will structure out portfolio around in order to create enough passive income for one of us to focus specifically on property on a full time basis.

If anyone has any thoughts on the above we'd greatly appreciate your opinion.

Cheers!

Sounds like a well thought out plan.

I dont know much about the area at all, but i have spoken to a few investors (outside the forums too) who have mentioned Cairns as a bit of a hotspot (some big Government project?).

Could make an ideal destination for property no1. With a bit of research and on the ground intel, you might be able to pick up a good deal too.

 

[slopshua]

Thanks for the reply Brady.

The answer would be no, we wouldn't be buying in Cairns if we weren't going to be living there. However, because I currently have a lot of spare time, I thought it aught to be something we consider as I would be able to spend a lot of time improving a property over the 12months.

It's the time factor that's made us think that Cairns could be an option. We're in the enviable position where one of us is being paid a full time salary but works less than part-time and we want to take advantage of that.

 

[D.T.]

Renting is generally cheaper and not having a PPOR mortgage means your serviceability will probably allow for a couple of IPs (provided you have deposits)

So comes down to your goals,
-Do you want to get into own PPOR within next couple of years? If so you're better off saving funds for that. You can then leverage from that to get your IPs
-Or do you want to get a nice portfolio going, if so stay renting and


Keep in mind
- its more tax advantaged to get PPOR first (ie have 80 or 90% debt on PPOR vs 80-90 on IP then having to go 105 on PPOR)
- You may lose your FHOG benefits if you get IP first

 

[slopshua]

Thanks DT.

Getting into a PPOR isn't of great importance for us at this stage. We're under no illusion that our dream home is many many years off and that we're likely to be moving between cities/states for at least the next 3 years or so. We have no problem with renting and so establishing our portfolio is of more importance to us at the moment.

That said, if we can make a quick buck off a chunk deal in Cairns during the 12 months we'll be there then surely that should be worth considering?