Yes, but the sale is marked as 'undisclosed'. It did go for above the estimated price range, though.
Staying motivated on a low income?
- Thread starter AndrewT
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Yes, but the sale is marked as 'undisclosed'. It did go for above the estimated price range, though.
She must have a very low gearing though...
She's a nurse, a graduate nurse. They probably make $50k tops. After tax that's around $39k. 80% of it goes to interest. So that's 30k interest payments.
At 6% interest rates, this represents a loan of $500k. This property is $1m? So 50% gearing. Not sure if people follow...
In other words her family has deep pockets (they've given her 500k cash) and I'm sure she'd have a lower likelihood of defaulting than the people geared up to 95%. Even if she bought at yields of 3%, that alone can cover 6% interest rates so worse comes to worse she just moves out and rents it out. Don't know what all the drama is about...
On the other hand, I have a friend who bought his place in Werribee. He was already on 90% gearing. I don't know how mortgage lending works nowadays, but this guy refinanced his house for an extra 60k two months ago and has already blown most of his money (40k on holidaying, Korean prostitutes, and some for his Korean wife who used to be a prostitute too etc... he has another 20k left and he's going to invest it in some failing business). It's people like these that will bring the market crashing down.
She's a nurse, a graduate nurse. They probably make $50k tops. After tax that's around $39k. 80% of it goes to interest. So that's 30k interest payments.
At 6% interest rates, this represents a loan of $500k. This property is $1m? So 50% gearing. Not sure if people follow...
In other words her family has deep pockets (they've given her 500k cash) and I'm sure she'd have a lower likelihood of defaulting than the people geared up to 95%. Even if she bought at yields of 3%, that alone can cover 6% interest rates so worse comes to worse she just moves out and rents it out. Don't know what all the drama is about...
On the other hand, I have a friend who bought his place in Werribee. He was already on 90% gearing. I don't know how mortgage lending works nowadays, but this guy refinanced his house for an extra 60k two months ago and has already blown most of his money (40k on holidaying, Korean prostitutes, and some for his Korean wife who used to be a prostitute too etc... he has another 20k left and he's going to invest it in some failing business). It's people like these that will bring the market crashing down.
More than likely, her parents have pitched in equity from a property (possibly PPOR) so there's probably still a loan for the value of the property. To me, if she's having to spend 80% of income on mortgage repayments, that's irresponsible lending (unless parents pitching into repayments, too)
Well, she obviously has parents as a buffer (I am in similar situation). So what if interest rates go up another 2 or 3%? As you said, she can rent it out or better, get her parents to foot a portion of the mortgage.
I calculated that for me to service my loan, it would take about 75% of my after tax income (so pretty close to hers). I am leasing it out though to tenants so it makes it much easier. For me, if sh*t hits the fan and I lose my job, my parents are going to keep the mortgage payments rolling in so in hindsight, nothing to fear for her.
Anyways, on a side note, she looks cute so should have no problems finding someone (maybe a guy, haha) to rent her 2nd bedroom.
It was probably 'expensive' when I bought it, but was valued 1.5months after auction and went up another $150K. Given the current market, my house is probably worth an extra $200K since I bought it.
In fact, pretty much everyone who bought in 2009 is doing better don't you agree?
You might be surprised. She probably only has a mortgage that is $300K also and parents forked out $600K cash or line of credit. Amongst my circle of friends and people I know, this occurs quite frequently. Have a friend on first year graduate salary who bought a house for $1.2mil in Bentleigh last year, another had a $1.6mil property fully paid by dad in Canterbury (no mortgage styles). I could go on...
My mortgage is $300K and my parents gave me cash not far off from $600K (won't tell you guys exactly).
So they "gave" you over half a mill? Or are you paying that back? Not that it's any of my business, but I find it a bit rough you often spouting that "everyone should by in blue chip suburbs" when so many people don't have the luxury of a $500k handout (or handup if you prefer). But you make it sound like anyone can go for Brighton, Toorak, South Yarra, Brunswick, when that's clearly not the case. I mean, good on YOU for be given a hand, but don't bag all those who didn't.
Exactly!!! Wow, if I got a handout from my parents of $600K I could have bought my first home in Brighton! Not everyone has that luxury, in fact the minority would have that. Most people such as myself have done it all on their own and on a single salary. If "sh** hits the fan for me", I have no one to go running to, which is why I choose to minimise my risk and buy investments in the outer suburbs you rubbish so much. In fact I find your previous posts hilarious now, I knew from other peoples posts that daddy had helped you, but he just about bought it for you! I wonder if your outlook on where to invest would change if you were a big boy and had to do it yourself.
I have NEVER bagged those less fortunate than myself. I challenge you to find anything I have posted that is remotely suggestive of this. Yes, I bag the suburbs and the rationale, but not the financial circumstances of the poster.
Instead of whinging about cash handouts, you should question why my parents were able to provide me with this 'cash assistance' like the 26 year old chick who bought in North Fitzroy. In all honesty, it is because my parents bought 'fairly well' in inner city (main reason and working hard), no matter if it is the size of shoeboxes. We did buy in the west before, such as Keilor Downs, but sold for little growth, and hence learnt our mistakes. Perhaps the reason why 'their parents' can't help out their kids (assuming even if they wanted to) is because they invested poorly because low income is no excuse. My parents came to Australia as Vietnamese boatpeople with nothing and witnessed all sorts of things like cannabalism, starvation etc... and most of the income (still do today) is sent back to Vietnam to feed the 9 or so siblings and their children because the country is still pov as sh*t.
To answer your question, if I had to do it myself, I'd go for a flat or unit inner city or middle suburb that is NOT in the west. I don't get tempted to buy outer suburbs just for the sake that I could get a house.
Oh, btw, I have a mortgage. You obviously confused my mate's bro who has a fully paid off house.
My parents probably have a million if not millions sitting around in shares/super/term deposits for their retirement. I'm currently paying them back for about $3k we borrowed to get our new house built earlier than we would have otherwise been able to. They are extremely anti-property investing.
Just because your parents *have* the means to give you tonnes of money doesn't mean they *should* do it. Kids need to learn somehow. I have no intention of giving my own offspring any large cash handouts when they are older, but I do intend to buy a city IP sometime in the next few years so they can rent a stable place off me at a discount while they are young and fresh out of home, until they can stand on their own two feet.
Just because your parents *have* the means to give you tonnes of money doesn't mean they *should* do it. Kids need to learn somehow. I have no intention of giving my own offspring any large cash handouts when they are older, but I do intend to buy a city IP sometime in the next few years so they can rent a stable place off me at a discount while they are young and fresh out of home, until they can stand on their own two feet.
Ok, fair enough, I respect your opinion. Each to their own, one way is not necessarily the 'right way'. My PPOR is inner city and I'm happy with the gain over the last 15 months, however I don't go inner city for investment purposes at this stage because I'm still building equity and being solely responsible for my own decisions, I need to rely on a good yield too, which is more difficult to get in the city, especially when you add body corporate fees.
Rather than put myself through the pain of re-reading your posts, I will not accept that challenge and withdraw the allegation that you bag individuals.
Who's whinging? I was merely trying to comment that "just getting in" to the market, at 65-80% of income going on repayments, is highly risky and not possible for most people. Yet you were saying how good it was, presumably ignoring the risk, because you have parents who have "helped out". Not everyone has the luxury, and I reckon this girl is stupid for getting in so far over her head.
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Yaaaawwwnnnnnnnn..........streetccchhhhhhh.......hooo....hummmmmm...
Who cares........this is a property investing forum not a how much mommy and daddy gave me to purchase a house in the East of Melbooounrne.....forum!!!
Call me when you have made cash by doing it yourself.....as some people have said....your strategy will only work for people who can hook into Mum and Pop bank!
Who cares........this is a property investing forum not a how much mommy and daddy gave me to purchase a house in the East of Melbooounrne.....forum!!!
Call me when you have made cash by doing it yourself.....as some people have said....your strategy will only work for people who can hook into Mum and Pop bank!
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As Sash said. Having Mommy & Daddy helping (or doing it for you) does not make you stretch and learn how to do it yourself. Knowing you can rely on them to bail you out should you overstretch is just dangerous.
I think having the parents there for support is great, we had to rely on my partners parents to make up most of our deposit on our first place. I was shitty about having to do it, and it took some convincing before I was happy to borrow any sort of money off them.
Key word though is borrow. I will and have been paying back every cent we owe them for helping us out. I don't want us to rely on anyone else but ourselves!
Personally, if I end up being successful in PI and having some sort of cash when my 'to be' children are getting to the age of leaving home then I would be doing as RumpledElf said.
Key word though is borrow. I will and have been paying back every cent we owe them for helping us out. I don't want us to rely on anyone else but ourselves!
Personally, if I end up being successful in PI and having some sort of cash when my 'to be' children are getting to the age of leaving home then I would be doing as RumpledElf said.
Now that is sensible!!!
You are able to save and invest because of this!
When I bought my PPOR mine was 22% of my wage
Now because the IR have increased it is 29% of my wage
When IR go up another 1 % I will still be able to cope.
Do you make all the repayments on your $300 K mortgage? Just curious if mum and dad help lol
Where are you currently living if you are leasing out your ppor?
Sorry to hijack your thread Andrew lol but i think it has already been hijacked!
On the topic of motivation. I agree with Rob Williams when he says to have an action plan! Record your savings. Have short term, medium term, long term goals. Write them down. Implement. Develop a strategy. eg A short term goal. To save $5000 in 6 months. Believe me when i hit the $20 K mark I was so happy. The next goal that motivated me was $30 K. I felt like I had achieved so much i was so proud of myself and on top of the world. Once I hit a certain amount of savings I knew I was ready to buy my 1st ip
I can relate to you as I'm on a lower income. I think we have to just try to somehow keep up our motivation and "patience" & "perserverance" is the key. Dont compare yourself to others here on SS. Some are on higher incomes, some have been investing for years and have many properties. Some were once like you and me on lower incomes but slowly and surely they have accumulated over time. It takes time.
Oh and yeah I find that reading old threads from years ago here on ss has been very motivational for me. I started on the last page of the general property investing forum at page 450 I think it was and have been reading the retirement/strategies threads. Currently i'm up to page 250. I have found some real gems.
Keep doing what your doing. You are saving heaps. Well done!!
On the topic of motivation. I agree with Rob Williams when he says to have an action plan! Record your savings. Have short term, medium term, long term goals. Write them down. Implement. Develop a strategy. eg A short term goal. To save $5000 in 6 months. Believe me when i hit the $20 K mark I was so happy. The next goal that motivated me was $30 K. I felt like I had achieved so much i was so proud of myself and on top of the world. Once I hit a certain amount of savings I knew I was ready to buy my 1st ip
I can relate to you as I'm on a lower income. I think we have to just try to somehow keep up our motivation and "patience" & "perserverance" is the key. Dont compare yourself to others here on SS. Some are on higher incomes, some have been investing for years and have many properties. Some were once like you and me on lower incomes but slowly and surely they have accumulated over time. It takes time.
Oh and yeah I find that reading old threads from years ago here on ss has been very motivational for me. I started on the last page of the general property investing forum at page 450 I think it was and have been reading the retirement/strategies threads. Currently i'm up to page 250. I have found some real gems.
Keep doing what your doing. You are saving heaps. Well done!!
