Right frame of mind for a beginner?..

[RetireEarly]

AA,

Here's a suggestion for you:

Buy the place, claim the FHOG and move in with your mates... you can then move out of it say 12 months down the track and use as a rental property.

The benefit of doing this allows you to hold the property for 6 years without paying CGT as the initial purpose was as a PPOR.

The equity you have built up and savings contributed to the loan in the first 12 months should allow you to buy again in 12 months time.

Please seek your own indeoendant financial advice, but this is what I did 7 years ago and it enabled me to build an attractive portfolio of 5 properties in Melbourne during that time.

If I took the home option only, I would still only have one property. If you are patient you can have your cake and eat it.

Good Luck!

 

[skater]

Bearing in mind the good deal you have on your current rent, the fact that it is unlikely to increase in a hurry & the fact that you are happy living in your current accommodation, I would suggest you stay put & make your purchase an IP. You can always claim your FHOG later, when you do purchase your PPOR.

As far as increasing the value of the IP is concerned, you can always find something that is structurally sound, but grotty, with an overgrown yard. A lot of people won't want something that is so ugly, but if you are careful you can find ones like this that need minimal $$ spent on them.

Tidy up the yard, give it a good clean & put tenants into it straight away (there are tenants out there that will rent it) & when they move out give it a thourough paint. Paint is one of those things that will give the place an instant face-lift & costs little to do if you can do it yourself. By doing this, it can be argued that you are repairing wear & tear & the costs will be deductable, whereas if you do it prior to the tenants moving in the costs will be added to the cost base. DO NOT OVER CAPITALISE on reno's.

 

[newpoint]

Hi Aussie Assault, I am going to put money in Ballarat for investment props. any advice regarding to this big area? is Wendouree a good start? thanx

 

[our obsession]

I have some long term growth statistics for Ballarat and some of her areas which maybe of interest to you:

Ballarat: 1994 Median House Price: $75,000............2004 MHP: $190,000.................Change of: 153%

Beaufort: 1994 MHP: $47,500.................2004: $133,250............181%

Bendigo (just for fun): 1994: $84,000..........2004: $200,000..........138%

Buninyong: 1994: $101,500..................2004: $222,500..............119%

Castlemaine: (not Ballarat, just for fun).. 1994: $74,875...............2004: $210,000...................180%

Creswick: 1994: $71,500....................2004: $170,000........138%

Daylesford: (Lovely tourist area): 1994: $90,000.............2004: $260,000..................189%

Miners Rest: 1994: $117,500............2004: $235,000............100%

Sebastopol: 1994: $75,000...............2004: $173,500..........131%

Skipton: 1994: $33,500.................2004: $115,000.............243%

Wendouree: 1994: $79,250..............2004: $176,056............122%

The data is a little old to gauge the Ballarat city and suburb performance, but interesting figures all the same..(I'm over investing in Bendigo area, and values are on par with that of Ballarat and region, give or take the odd less or more gain).

Statistics courtesy of Victorian Valuer-General 1994-2005