Too old and poor to start investing?

[The Y-man]

Point taken, however I don't have access to a 'personal' phone for most of my working day (therefore, business, hours), and many websites are 'blocked' at work (also making dealing with many things almost impossible).

Wattleido said "the net".

If you haven't got access to a phone, you can email at night and weekends. Not the end of the world.

Same with accessing the web. Do it at night.

I get that the little one needs looking after - but think of it as the extra mile you need to go for them, not just you.

The Y-man

 

[KayTea]

Wattleido said "the net".

If you haven't got access to a phone, you can email at night and weekends. Not the end of the world.

Same with accessing the web. Do it at night.

I get that the little one needs looking after - but think of it as the extra mile you need to go for them, not just you.

The Y-man

That's my thinking - as long as the 'support team' are happy to doing everything via email (which I'm on every night), it will be great (maybe just a little slower than immediate contact). Where there's a will, there's a way, right?

 

[Blacky]

How do you eat an elephant

KayTea

A lot of great info has already been provided here.

If I was just starting out, I would start with a strategy. One of the reasons I think a lot of people get confused and get scared of buying the wrong thing is that they don't know what they should be buying in the first place.
A question was asked "what are you looking for - capital growth or cash-flow - to which you answered "both". This is fine, but I don't see that you have narrowed it down well enough.

Start with the 'end' in mind. What do you want in xx number of years? is it an equity position, a cash-flow of x per year? What ever it is, its your personal end goal - no one can tell you what it is.

Then work backwards from there. Make a few (researched) assumptions around purchase prices, rental returns, capital growth - this will tell you what your purchasing strategy will need to be. It will narrow down your search fields drastically and make the whole thing seem far less daunting.

While I can understand the use of a self proclaimed professional - I don't think it is necessary. You need to remember that at the end of the day, they will not make your purchase decision for you. You make it. Therefore you still need to know that what you are buying fits with your purchasing strategy.

If the self proclaimed professional holds your hand and gives you the confidence to take action - which you wouldn't have otherwise - well, what is this worth to you?
You will pay for their services - therefore its a guaranteed expense. The chance "losing money" is a risk. Paying the self proclaimed professional does not remove (or arguably deminish) this risk. At the end of the day if the purchase doesn't perform as anticipated, they will not take any responsibility for this.

Start with a strategy. Then talk to a good broker (or Banker) (there are plenty on the forum here to choose from). If you then need further help, I would talk to a buyers agent (again plenty on the forum to choose from). This will make up the vast majority of professionals you will need for your first purchase - then live and learn from there.

40 I would say is still relatively young to be starting out. Given you have a reasonable starting position (50% equity already), it will only take 10 years or so to be in a comfortable financial position.

Good luck with it - be sure to keep us up to date with how you get on. Don't fear mistakes - just learn from them. We have all made mistakes - and if we haven't it just means we haven't been trying hard enough, which in its own right is a mistake.

Blacky

 

[geoffw]

I'm 60 and bought my first IP aged 43. I had no intention of ever buying again. Until I was 47.

When I bought it was locally through the local agent who I saw on Saturday mornings.

Last year I bought a property without having met the agent, the lawyer or the PM. Almost all by email.

I'm in a very similar situation with work. I'm starting to look again. It's all net and email after hours. I don't see that as any sort of a problem.

 

[KayTea]

Start with the 'end' in mind. What do you want in xx number of years? is it an equity position, a cash-flow of x per year? What ever it is, its your personal end goal - no one can tell you what it is.

Blacky

Thanks Blacky - you've really forced me to clarify, especially for myself, what it is that I want to get out of this. It was all a bit 'pie in the sky' to just want to 'get ahead'. I now know which goals I want (equity vs cash flow), and in what time frame - I just need to sort out if, and how, I can get that to happen.

 

[china]

Getting started in property purchasing is a very frightening and daunting experience. I remember the experiences well.

I bought my first property - my PPOR at auction on a Saturday morning. After signing the contract, my hand was shaking badly, making it difficult to write out the ten percent deposit cheque. The shakes continued for about 24 hours. But the purchase has turned out well and I am enjoying the PPOR.

Then a few years down the track, I bought my first (and only) commercial property age late 30s, without visiting it. I knew where it was and the building. Having read this forum a lot, I had some ideas about yields / tenants / price per sqm / etc. I sent the agent an offer by email which was accepted by email. I had to visit the conveyancer to go through the contract and give her a cheque.

I am now happily entrenched in it as a owner occupier. A subtenant's lease pays for the strata fees / rates. I dont pay rent obviously but if I did at market rates, it would be an 8% net yield on the purchase price plus renovations. I am also getting tax deductions on depreciation on the renovations but not the building (too old).

My experiences lead me to believe that all property purchases can require a bit of a leap of faith and hopefully it all turns out well. Information on this forum and interaction with participants on this forum has helped immensely.

 

[sanj]

Didn't you buy that propety in your SMSF China? Are you allowed to use it personally without paying market rent on it?

 

[The Y-man]

That's my thinking - as long as the 'support team' are happy to doing everything via email (which I'm on every night), it will be great (maybe just a little slower than immediate contact). Where there's a will, there's a way, right?

I don't think I have ever absolutely had to actually talk to "my team" (lawyers, brokers, property managers etc) on the phone except maybe the realestate agent sales rep when buying a propoerty - who are usually happy to talk after hours anyway.

The Y-man

 

[china]

Didn't you buy that propety in your SMSF China? Are you allowed to use it personally without paying market rent on it?

Yes the SMSF owns it and I pay rent to SMSF. For the purposes of this thread, I chose to keep it simple. But essentially, it is just moving my money around different accounts. And keeping the accountants well fed.

 

[D.T.]

Yes the SMSF owns it and I pay rent to SMSF. For the purposes of this thread, I chose to keep it simple. But essentially, it is just moving my money around different accounts. And keeping the accountants well fed.

Don't keep them too well fed mate, they might need one of those Bariatric jobs

 

[geoffw]

Yes the SMSF owns it and I pay rent to SMSF. For the purposes of this thread, I chose to keep it simple. But essentially, it is just moving my money around different accounts. And keeping the accountants well fed.

... and I believe it will help the ATO to be less well fed.

Rent you pay reduces your taxable income (or company's taxable income) - but rent received by the SMSF only pays 15% tax.

Or something like that. I think.

 

[The Y-man]

But to the less experienced person it may well be money well spent. Especially if the alternative is never having got started in the first place.

That's an interesting viewpoint Simon - I admit, we would never have built up at the speed we did (out of desperation) unless our experience with the "one stop shop" happened. Wasn't pleasant mind you (getting our deposit stolen by them etc), but it did get the boot in.

The Y-man

 

[The Y-man]

I liken it to learning to drive. Think about the very first time you got behind the wheel of a car and were told to 'go'. Trying to remember all the road rules, plus how to actually make the vehicle move, and deal with the other motorists on the road, following street signs and traffic lights - all a huge deal - at the time. You'd done all the reading, learnt the road rules (in theory), even got your Ls, and thought you knew how it all worked. But when it came to actually be in control of a car, on the road, it was a whole other story. Now, most of us don't give driving a second thought - it's just a part of daily life.

I suppose I'd just feel comfortable with a 'driving instructor' along for this next set of driving lessons..........

Unfortunately, there aren't a lot of "driving instructors" - many try to sell you the car, the car insurance, car seat covers, a tow bar, paint protection, and a nodding Hello Kitty to sit on the dash.........

Also, how do you tell a "good instructor"?

The Y-man

 

[WattleIdo]

If you're the cautious type, put your skills to good use. Make sure you research and interview all your instructors thoroughly.
There are one or two out there who will give you some lessons and take you through the preliminaries without trying to sell you anything. They're probably the ones you want to start with.
Then, if it's your style, go for some of the recommended BA's and start interviewing them.
Don't jump the gun and expect someone to look after you. That approach is just a fantasy.

 

[Aaron_C]

Didn't you buy that propety in your SMSF China? Are you allowed to use it personally without paying market rent on it?

You have to pay market rent for it since it's an arms length thing but paying yourself is effectively being in it rent free.

 

[Aaron_C]

... and I believe it will help the ATO to be less well fed.

Rent you pay reduces your taxable income (or company's taxable income) - but rent received by the SMSF only pays 15% tax.

Or something like that. I think.

That's exactly how it works. It is beautiful. Don't forget the 10% capital gains tax on your commercial building if you do sell it.

 

[TMNT]

I'm 60 and bought my first IP aged 43. I had no intention of ever buying again. Until I was 47.

When I bought it was locally through the local agent who I saw on Saturday mornings.

Last year I bought a property without having met the agent, the lawyer or the PM. Almost all by email.

I'm in a very similar situation with work. I'm starting to look again. It's all net and email after hours. I don't see that as any sort of a problem.

when I was 19, I thought life was over by 25, ie if you werent a squillionaire, then why bother??? an old ***** at 30 would look silly in a ferrari

got to 25, and I thought, hmmm, lifes over at 30

im now late 30s, and think life's over at 45, no point having a yacht if you are in a wheel chair or a old persons home,

I admite you buying your IP at 43, and are still hungry at 60!

hope to be like you!

 

[Ergophobia]

My mum just bought her first ip at age 67 with little income.

Finance was difficult, but her credit union came to the party.

My advice, educate yourself here and by talking with people who have done it before (re-agents, finance brokers and investors) but dont buy into their sales pitches.

Then research your local area prices and rents. Avoid emotion and just look at the yeild and growth figures. Often the ugliest investment is the most profitable.

When you buy, add value through your own labour. Gardens and painting are an easy way to add value and increase rental interest and require little trade skills (sorry painter )

Self manage your rental property if possible as you keep more in your pocket and when starting out it is not a lot of effort.

Let your first property grow, then draw down the equity and buy another. Then these two become 4, then 8, then 16...

 

[ZachAnSel]

when I was 19, I thought life was over by 25, ie if you werent a squillionaire, then why bother??? an old ***** at 30 would look silly in a ferrari

got to 25, and I thought, hmmm, lifes over at 30

im now late 30s, and think life's over at 45, no point having a yacht if you are in a wheel chair or a old persons home,

I admite you buying your IP at 43, and are still hungry at 60!

hope to be like you!

Amen to that!!!

In fact, I can see one of my mentor still have that desire..
70 years old and still going! have a energizer bunny spirit.

 

[WattleIdo]

My mum just bought her first ip at age 67 with little income.

Finance was difficult, but her credit union came to the party.

My advice, educate yourself here and by talking with people who have done it before (re-agents, finance brokers and investors) but dont buy into their sales pitches.

Then research your local area prices and rents. Avoid emotion and just look at the yeild and growth figures. Often the ugliest investment is the most profitable.

When you buy, add value through your own labour. Gardens and painting are an easy way to add value and increase rental interest and require little trade skills (sorry painter )

Self manage your rental property if possible as you keep more in your pocket and when starting out it is not a lot of effort.

Let your first property grow, then draw down the equity and buy another. Then these two become 4, then 8, then 16...

excellent advice!