Suggestions in QLD for newby investor?

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Rookie1

Hi all,
Stumbled across this forum whilst researching - and it is great! so much info from people who have done it all before. Best people to learn from in my opinion!
So any help/advice would be greatly appreciated - as I am new to investing, and don't want to stuff it up the first time :confused:

I am a looking to purchase a townhouse in Woodridge, QLD or maybe even in Redbank Plains QLD as a safe 1st investment - and only marginally negative cash flow (according to my maths skills). I also have a small budget of up to $210,000. I have $18,000 in savings. I am single with 2 x kids. Salary $63000/pa.

I would greatly appreciate any feedback on my suburb choices...or suggestions of other areas safe for a first timer within my price range.

Any thoughts on Beenleigh? Eagleby? Nerang? I would like to stick to the SE QLD area, as I grew up here - and according to my research I could still find a good deal...but not for long, am I on the right track?

Also what is the general thought on house vs townhouse for 1st time investor like me? I am thinking town house in this price bracket, low maintenance etc.

I have many questions, but will leave it there for now... I would really appreciate any thoughts, advice, or words of wisdom :) thanks in advance!
 
Rookie1 said:
I am a looking to purchase a townhouse in Woodridge, QLD or maybe even in Redbank Plains QLD as a safe 1st investment - and only marginally negative cash flow (according to my maths skills). I also have a small budget of up to $210,000. I have $18,000 in savings. I am single with 2 x kids. Salary $63000/pa.
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Hiya

I'm sure you already have but suss out the rates and body corp fees (if applicable) for any property that you're looking to purchase in those areas.

From memory - the rates in Logan were quite high, which could cause the holding costs to be a bit more than expected. Body corp fees will vary quite a bit too if you're buying a unit/townhouse.

Cheers

Jamie
 
Forget the property itself for the moment.

Talk to a good mortgage broker first. Understand offset accounts, and how interest only can be a good idea.

With a 210k purchase, and 18k savings, you're going to need a 95% LVR lend. Can you get this? Has a broker confirmed that you can get this?

Do you know how much you can save every month? Do you have a budget? If not, do one.
 
Thankyou for your advice I have made an appointment with Mortgage Choice today. The gentleman I spoke to over the phone seemed very helpful, and cautious - rather than trying to push me into something. Will see him Friday and take things from there.

I have previously done a couple of online loan pre approvals just to see where I stand. They seem to be positive, as I have no other loans, and a credit card that is always paid to $0 owing each month.
I save $650/fortnight.
Perhaps I am better off to just keep saving? I did feel like I had done plenty of research, but a larger deposit would probably make me feel safer :)
Does anyone have an opinion on whether I may "miss the boat" so to speak if I were to wait until the end of 2014 to buy in Logan area?
Thanks again, this is such a great forum! any further advice would be great.
 
Hi again

Please ensure the franchise broker has an understanding of IP finance structures - a lot don't.

Be careful with shopping banks for pre-approvals. You might end up with incurring multiple hits to your credit file without knowing. If you're in need of a 95% lend then this is something you can't risk. You only want to apply for this loan once.

Cheers

Jamie
 
Rookie1 said:
Thankyou for your advice I have made an appointment with Mortgage Choice today. The gentleman I spoke to over the phone seemed very helpful, and cautious - rather than trying to push me into something. Will see him Friday and take things from there.

I have previously done a couple of online loan pre approvals just to see where I stand. They seem to be positive, as I have no other loans, and a credit card that is always paid to $0 owing each month.
I save $650/fortnight.
Perhaps I am better off to just keep saving? I did feel like I had done plenty of research, but a larger deposit would probably make me feel safer :)
Does anyone have an opinion on whether I may "miss the boat" so to speak if I were to wait until the end of 2014 to buy in Logan area?
Thanks again, this is such a great forum! any further advice would be great.
Click to expand...

There is some gentrification planned for Beenleigh cbd, they say its going to be the hub in between goldy and Brissie, a old house on a subdividable block in my opinion could be a good option which might sit comfortably in ur price range
I personally don't like woodridge at all but I would see cg rising there before Beenleigh, but at this time better value for money and more options in Beenleigh.
I also think that I would want to be purchasing within the next 6 months if you were interested in this area/s, people will tell you that's it's hot, but trust me I live here and it ant hot
The other areas u mentioned would also be good maybe as there is lots of interest in them I have heard from my broker

Just my opinion here, do lots of research

Edit; sorry I just noticed your price range, a little bit more and something like this might be ok http://m.realestate.com.au/property-house-qld-beenleigh-115771203
 
Last edited:
Rookie1 said:
Hi all,
I am a looking to purchase a townhouse in Woodridge, QLD or maybe even in Redbank Plains QLD as a safe 1st investment - and only marginally negative cash flow (according to my maths skills). I also have a small budget of up to $210,000. I have $18,000 in savings. I am single with 2 x kids. Salary $63000/pa.
Click to expand...

Since the differential between house/land and townhouse is not very large, if you stretch your budget a wee bit more, instead of a townhouse in Woodridge, you could get a house with land. Below is an example: -

230K - highset house with land 708 sqm
http://www.realestate.com.au/property-house-qld-woodridge-115894119

210K - townhouse with body corporate/strata fees
http://www.realestate.com.au/property-townhouse-qld-woodridge-115614255

The land component alone of the house is approx 140K, so you get the house for 90K. Looks like you can build in downstairs as well which will be a bonus.
I doubt you can get a house built with brick, tile, hardwood, double garage and deck for 90K anymore. I could be wrong ;)
 
Thank you Jamie M, will do. He did mention that a principle and interest loan would be better - during our phone conversation which made me wonder, as I feel an interest only period would suit me better from the research I have done. I will definately keep an open mind. Thanks for the advice. May contact you down the track :)
 
Thanks for your help guys. It seems if I do stretch my budget a little more, a whole new world of single dwellings opens up!
These places from the posts above do seem like much better value - with more potential.
I think I will just stick to these areas and keep my eyes peeled.
So true about the 90K for a house, when you consider the value of the land!
Thanks again for great advice :)
 
Rookie1 said:
Thank you Jamie M, will do. He did mention that a principle and interest loan would be better - during our phone conversation which made me wonder, as I feel an interest only period would suit me better from the research I have done. I will definately keep an open mind. Thanks for the advice. May contact you down the track :)
Click to expand...


hmmm alarm bells are ringing already - it's not often that I'd recommend a P&I set up for an IP loan.

In any case, it's a good thing that you've done your research so you have an understanding of what your requirements might be.

Don't feel restricted to using local guys if you feel that the service/advice is ordinary.

Cheers

Jamie
 
Rookie1 said:
I also have a small budget of up to $210,000. I have $18,000 in savings. I am single with 2 x kids. Salary $63000/pa.
Click to expand...

It does not look like you will be able to afford a $210k property. At 95% LVR you will need 24k to cover everything plus I assume some money for repairs if any and to pay interest on the loan if property is currently empty.

18K will only buy you a $160k property at the moment. For this amount you can buy a small 2br townhouse in Beenleigh which should be cash flow positive.

Pre-approval does not mean much as it is based only on a few simple parameters where banks take much more in the account, especially if you are going 95% LVR as your file will be looked at not only by a bank but also by an insurance company and they usually more stricter than the banks.

If you must jump on the property ladder but don't have enough cash there are schemes to buy property with no money down. I am not a specialist in them so can't comment, but if you want you can explore this avenue.
 
Hi Dimsh,
Thankyou for your advice :) maybe I should elaborate on my situation and see what you guys think?...
I am looking at purchasing in a few months - only because of my work/life situation. I work in defence and have done for 4 yrs now. but will be transferring to reserve work in September. I am separating from my partner as well. (lots going on - I know)

I have been researching areas, reading books, magazines, internet etc for around 2yrs now - it is how I spend my spare time :) and saving all I can whilst on maternity leave. Half of "our" savings went to my partner so I am left with only $18,000. I feel I am very good with money and budget in general - back to full time work this week, so more to save! :)

I will be in pretty much the same financial position that I am in now(meaning budget, savings etc) when I do leave full time Defence, (as I will move into a granny flat in my parents backyard - $100/week in Northern NSW) So cheap rent there, and tax free reserve work + child maintenance etc.

My thinking is that I need to buy a property whilst my salary looks good on a loan app. The reserve work is well paid and frequent, also does not affect child support. But as it is not "full time" PAYG I fear that it could take me years to prove my saving ability/serviceability. I would like to get my foot in the door to open more doors in the future.
So even a small townhouse with good cashflow for under $200,000 would be a good start right? thoughts?
Thanks in advance :)
 
Rookie1 said:
Thankyou for your advice I have made an appointment with Mortgage Choice today. The gentleman I spoke to over the phone seemed very helpful, and cautious - rather than trying to push me into something. Will see him Friday and take things from there.

I have previously done a couple of online loan pre approvals just to see where I stand. They seem to be positive, as I have no other loans, and a credit card that is always paid to $0 owing each month.
I save $650/fortnight.
Click to expand...

Still plenty of opportunities in SE Qld so don't panic. I agree with Alex Lee that you'd be best to get your finance sorted out first before making any commitment. I don't know much about Mortgage Choice but I do know that this forum has some of the best brokers in the business. Why not get contact a few of them and compare them with Mortgage Choice? I've learnt the hard way that getting the finance sorted out first is one of the keys in successful investing.
 
Hi all,

Beanie Girl - I will save $7200 in 4 mths. & will get a $5000 + tax return, long story :)

Nishy - Yes I will be eligible for DHOAS but only on PPOR

Pinkyboy - Ha ha you mean cyclone Dylan? glad it was a bit of a non event :)

Nth Brisbanite - I think you are right. I think I do have a fear of missing out on something in the area and buying my first IP at the wrong time. So much to learn, and I guess there will always be good properties for sale as long as the numbers add up :)
 
Rookie1 said:
Hi all,

Beanie Girl - I will save $7200 in 4 mths. & will get a $5000 + tax return, long story :)

Nishy - Yes I will be eligible for DHOAS but only on PPOR

Pinkyboy - Ha ha you mean cyclone Dylan? glad it was a bit of a non event :)

Nth Brisbanite - I think you are right. I think I do have a fear of missing out on something in the area and buying my first IP at the wrong time. So much to learn, and I guess there will always be good properties for sale as long as the numbers add up :)
Click to expand...

Hi Rookie1,

Say you saw a 230K property now or even a 300k property that you really, really liked but because of not enough deposit, you're going to have to let that opportunity go for the moment.

I am going to suggest something that can bump up your savings account in the immediate future so that 1. you have enough funds to put a deposit down and 2. You can show the bank at least 2 months of savings and that you have the deposit ready.

You leave full time service in Sept 2014 to go to reserves so we work backwards and find that you have 7 months from today to get your financial affairs in order and presentable to a bank or non-bank lender for an IP loan. You may even have 7 months or less to 'look good' to a bank for a IP/PPOR loan being able to show PAYG pay slips cos that's what they want to see, 2 months of payg pay slips, so the sooner you start looking for a property you want and the sooner you apply for a loan the better, within this window of 7 months.

It's only because you're a good saver that I am going to suggest this. In 4 months time, you'll have saved $12500, in another 4 months, the total saved should be approximately $20,000.

Instead of waiting 8 months to save that 20k and then applying for that IP, wouldn't it be nice to have that 20k now in your bank to add to your 18K? Maybe plus a little buffer of 10k additional for ancilliary IP expenses? (repairs, replacements etc) So should you see your dream IP in this short window, between now and 7 months, you can jump on it and secure it, no problem.

Ok, in order to do this, Deep Breath here,
have you considered taking 2 or 3 '0 % balance transfers' of 10k each from banks such as Westpac, NAB, Citibank and transfer this monies onto your 0 balance credit card, then take that money from your credit card and put it into your interest bearing bank account (where it can also earn interest!)

Are you with me so far or have you or any other Somersofters fainted yet?:D

Westpac Low rate card gives 0% for 14 month balance transfer
NAB Low rate card gives 0% for 15 months balance transfer
Citibank Clear Platinum gives 0% for 12 months balance transfer

That means you only have to pay a minimum sum back to each bank every month and there's 0% interest charged on each balance transfer. But you're going to have to be very disciplined about paying the minimum sum back every month on each card when it's due.

But because you're so disciplined, I don't think you'll have a problem.

All 3 cards revert to lower interest rates after the interest-free period is up, compared to other cards. But by the time, the interest free period is up, I reckon you would have saved enough to pay it all back anyway so you never get slugged with the interest after the 0% interest free period is up (you have 12-15 months to save 20-30K to pay back all the cards)

Westpac Low rate card reverts to 13.49%. Annual fee $45
NAB Low rate card reverts to 13.99%. Annual fee $59
Citibank Clear Platinum reverts to 12.99%. Annual fee $49

Yes, there is an annual fee for each card but could be a small price to pay to 1. show savings in your bank for 2-3 months and 2. Have a deposit ready to place on a desirable IP. 3. earn enough interest on the monies to pay annual fees

Tell me what you think, Rookie1. If you are not comfortable with it, I perfectly understand, it's only a suggestion. It's just a suggested strategy in your arsenal that you could keep for contingencies.

Other somersofters, feel free to comment, but please don't flame, I'm only racking my brains to try to find a way OP can qualify for a bigger loan that she currently does and the clock is ticking down on her permanent PAYG service (September).

best regards,
Beanie Girl (putting on flame retardant suit):D

P.S
This is the link that compares and ranks the interest free balance transfers offers. Feel free to peruse. I've chosen that I think are the best of the offers but you may have other preferences which is A-ok

http://www.creditcard4u.com.au/?_s_...=33605641490&gclid=CNeQneizqLwCFckdpQodgTsAYQ
 
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