very low income earner

$32k, full time? Thats like $2k above minimum wage? And did you say you've been working at the same place for 9 years? WTF kind of company pays a loyal employee of 9 years so close to the bare minimum? Not to mention that many award minimum rates are far higher than that.

Get yourself a different job mate. Any job. You can work in retail and gets $40k as an assistant with minimal experience. What did you study at tafe?

All of that said, $120k is a cracking deposit, great work!

Assuming no debts, even on your current wage, I reckon you could get a $150k loan if the property was your PPOR and assuming you have no debt (source:borrowing power calculators). Taking into account your savings history (which is awesome) you could probably borrow more. If you got a 2br, and let out the other room, you could push it up a little more again. Even on your current wage, all is not lost!
 
The thing is, that $120k @ 6% in the bank with no PM/rates/maintainence expenses is actually pretty damn good.

Round here $120k is *just* enough to get you a block of land and put a really basic house on it that will rent for high $200's per week, but you'd need a bit more than that to finish it off. Eg $35k for a small block of land, $75k for base 3x1 house, then a lot on top of that for the finishing (maybe $30k extra). Do that, live in it for a year or so to do up the landscaping, sell it for more than you paid to build (or rent it), rinse, repeat. You'd get the first home builder's grant initially which would probably make up the difference. Can probably do this in any small regional and there's plenty of seasonal jobs for fruit pickers, labourers etc that will give you a bursty wage if not a continuous one. I live just north of serious wine country and there's always harvest jobs if you don't mind working outside.

I can point you at an exact block of land and house design/builder, you could do it all long distance, then move in and rent out the other two bedrooms.
 
i do earn a little more money now, closer about 32 - 35k per year now.


Gotta say, you have the strongest savings skills I've ever seen !!!
For the last 3 years you've saved an average of 25k per year on an average taxable income of 33k?

How did you possibly live on $150/week while renting an apartment and maybe eating and drinking once in a while?
Another source of income maybe?
 
Are you a stripper and earning cash in hand? You can tell us ya know. LOL

Some of the girls I know make more than $1000 working a Saturday night. Cash. Makes me wonder why I bothered going to uni and working in an office. Bah.:D
 
..maybe more to this story?

i only just recently moved out of home. thats how i saved so much. i get a little over $100 a week from interest on my savings account. so i have a second income. most years i have still been below the next tax threshold even when you take into account my interest income. most years i get money back because apparently i pay to much tax from my job. the last few years tho i end up owing a small amount.

but now after moving out im done with saving. ill still save maybe $200 a week if i wanted to but ive scarficed allot. all i have to my name is this

  • clothes (some still from high school :S)
  • computer (got with the $900 stimulus money)
  • a bed (had it since high school)
  • digital piano ($250 from ebay :D worth at least $400)
  • motorbike ($2000 bought for $3500 in '04)

thats they only things of value i have

the last time i saw a movie at the theaters was lord of the rings 1 back in 2002
i dont drink on the weekends or at all. havent seen my friends since january (we started not to get along anyway) long story short, my mates buy a carton every weekend and drive around in there skylines.

i drink nothing ride a learners motorbike and buy almost nothing for myself except a piano a few months ago. ive done that for the last 9 - 10 years. and its not easy. ive wanted a nintendo ds and wii since they came out. there actually pretty cheap but i dont need them to live i just want them really bad. so i cant justify buying them. i do that with every purchase.

now im just over it.

i even save my shrapnel at least 10 kg worth. about $300 i estimate
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flightcrank,
That clears up a lot.
How much would you say your housing costs are per month in your studio?

Had you considered renting a larger space and renting our rooms..This would make it possible for you to live rent free (or almost).
Travellers will pay more than regular roomates, and if you don't really like them..theywill be gone soon anyways.

We did this a couple of years ago, when we came to Australia for vacation and visit rellies. Didn't want to stay with rellies, so we paid $300 week for the use of a bedroom, make your own breakfast (food supplied) and kitchen priveledges.
We thought that was resoanble rent, as we only wanted it for 1 week in Sydney and 2 weeks in Melbourne.
 
But when your friends have no money when they are 45-65 you will be LAUGHING.

Time to attack investing in the same way.

Find a good yielding property. I would assume you are handy and can buy something that needs a coat of paint or a cosmetic improvement.

Borrow something like 70%, but borrow say 110-115% of the property. Keep some cash to make you feel comfortable on that rainy day.

Rent it out so the loan is tax deductible and the repairs are too. You may be able to use the equity from the improvements to buy another one.

Then go and buy yourself a nice 2nd hand car, a wii AND a nintendo and enjoy the bloody things - you have EARNED IT. And the 'investment' is then paying for your 'toys'.

The habits you have taught yourself will make you very comfortable for the rest of your life.

I only buy myself 'presents' when I have achieved something. You have achieved an incredible thing. You MUST enjoy it - that is the point of everything after all!

CONGRATULATIONS!!!

PS: Vitally important this. You must buy a 50" plasma for your wii and nintendo. Silly just having them sit on the carpet not plugged into anything.
 
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Find a good yielding property. I would assume you are handy and can buy something that needs a coat of paint or a cosmetic improvement.

Then go and buy yourself a nice 2nd hand car, a wii AND a nintendo and enjoy the bloody things - you have EARNED IT. And the 'investment' is then paying for your 'toys'.

I agree! You need to live life a little too, I don't believe in the whole complete delayed gratification. I'm all for delaying a fair amount of it to get ahead long term, but I'm only young once and I want to enjoy some things while I'm young.

You have done amazing things on your salary, congratulations. Please don't get disheartened now and give up. There have been some good suggestions here that might work for you. I'm not going to criticise your pay as I'm sure you have your reasons for staying in the job you are, however depending on what you're doing now, is it possible to maybe get a second part time job for the short term? Might help you initially in getting a property, and later on you can re-assess your situation. For example, if you have boarders helping your mortgage, and you are finding the second job too much you could give it up later. I've worked a Saturday job off and on over the years to bring in a little bit of extra cash flow. I admit I wouldn't want to be in a position where I relied on it and needed it, but rather it's optional so I know I can give it up any time and brings in a little extra. There are two income figures you need; one that satisfies the banks (the second job helps this bit) and one that satisfies your own comfortable budget.
 
This advice maybe will go down badly because this is an investment forum but here goes....

Drop 40k into a savings account you cant touch or leave it in your interest bearing account you talked about etc.

Take that 15k left over and buy an around the world ticket. Choose your destination, and make it last as long as possible, travel very poor and long.

Come back with extreme life experiences and an amazining 'i can do anything' attitude. You'll also still be 40k better off than your mates and probably know a cheap deal on a skyline to get you around.

Using this confidence and life experience get a much better job.

I would consider this investing in yourself.
 
myself on a single income and that income being low (27k per year)

When our son was born back in '01 it became apparent that my job was going to severely restrict our ability to allow both my wife and I to keep working and still be able to look after him, and me still earn a decent income.

I stepped away from golf and found a job as a PSA (like a nurses' assistant/cleaner/dog body). Every hospital has them.

I managed to arrange my shifts in such a way to earn almost $50k each year. Did this job for 3 years.

It was actually not that bad a job (even with all the cleaning), but no room for advancement "up the ladder" really.

This is just one example of how to earn an (almost) average wage with no quals required.
 
Since you seem to be a good saver, very conservative in outlook but have definite plans to own your own home, this is what I'd do:
1. Buy a block of land
2. Put in plans to Owner Build a house and garage
3. Build a steel frame kit garage on a slab with a toilet & shower in one end of it
4. Move into the garage and live there while you complete the house. Use the funds you'd normally be saving to build the house slowly.

Cheers, Alan
 
Hey, well done Flightcrank, top stuff.

$120,000, for me, my thoughts, number one I would scoot my butt off to my mortgage broker pronto to see about structuring the investment, loans, the whole kit/caboodle immediately and am thinking if, as long as I get a certain return from each IP I may possibly be able to purchase about 8 IP's, with money to spare. Possibly rough estimate up to, or over, about a million bucks of property with good enough returns to keep me (despite an 'apparent' lowish income) in good servicibility health, (and funds to complete), to keep filling my trolley, or shopping at least.

I wouldn't get myself too complicated a situation by construction, DESPITE that being my debut into IP first of all, because it was only because I knew for certain I was really buying well and the land block values were about to triple..made money on the deal at buying. Land blocks do not return you money, it can get complicated.

The already established IP's purchase would mean bucks on the table immediately, construction is dilly dallying, complicated, I spent 2 years researching thoroughly the ins and outs of a ducks bum about it. Having said that, if I knew what I knew now I wouldn't hestitate to get into as many cashflow positive properties as I could possibly handle, then get into constructions/deals if they met my criteria.

If you have the desire you are in an excellent position to build a healthy portfolio, (potentially) good returning IP's are out there, waiting...

Are you up to it?

(Congrats again, nice footwork).
 
fantastic savings! next step is to take the next step. this is the hardest because it's not physical or reliant on money - but rather you have to actually decide to buy something.

as an example of what you could buy ... we're just settling on two 1970's stock standard brick units. one cost $225k and the larger is $235k. i'll just use the smaller one for the example.

cost $225k - deposit of 10% $22,500
stamp duty/legals (nsw) $8.5k
new carpet and paint $2k

total up front cost $33,000


ongoing costs/yr
strata $1,700
pm $830
water/rates $1,250
interest @ 7.5% on 90% loan (have loan at 7.09% in pipeline) $15,187

total outgoings $18,967

rental income $300/wk or $15,600/yr

difference $64/wk tax deductable (i haven't included depreciation either)

...... now .....

if you were to put a higher deposit on something similar, say 30% deposit ($67,500), figure would look like

cost $225k - deposit of 30% $67,500
stamp duty/legals (nsw) $8.5k
new carpet and paint $2k

total up front cost $78,000


ongoing costs/yr
strata $1,700
pm $830
water/rates $1,250
interest @ 7.5% on 70% loan $11,812

total outgoings $15,592

rental income $300/wk or $15,600/yr

cost to hold $0

however, looking at the above figures, i'd be inclined to buy two at 20% dep (total up front of $55,500ea = $111,000), leaving you $9,000 emergency fund. two at 80% lend would cost you $32/wk each to hold on the above figures - or $64 together. and if you paid this shortgall out of the $9,000, you wouldn't have to put any money in for nearly 3 years, by which time the rents and values should have increased.

**so why aren't you doing it?

and don't be thinking i've bought this in some way out hick town ... this is edge of inner ring in the 8th biggest city in australia - 10mins to cbd, 2nd biggest shopping centre in nsw, beaches, university - 5mins walk to train and shops - 2 hours to sydney. and was voted by lonely planet as one of the top 10 places to visit in the world.
 
as for extra money - have a look at the "jim's franchise" thread in the coffee lounge. dont' buy a franchise, but for the investment of less than $1,000 (mower, blower/vac, line trimmer) you could start up your own lawn mowing business.

say, $50/lawn on average (i don't know what they charge but this seems ball park to me with some lawns bigger and some smaller), and you get a cliental of 6 lawns a week that you could do after work or on weekends ... that's an extra $300/wk.

take out travelling costs, tax, fuel for equipment you'd end up with - say - $250/wk. means the equipment would pay for itself in 4 weeks and after that you'd be making profit.

now, i was just talking 6 lawns a week outside of your job (1 a day). imagine if the business grew and you could start doing 4+ lawns a day? that's over $50,000/yr gross ...

no skill required.
 
ive wanted a nintendo ds and wii since they came out. there actually pretty cheap but i dont need them to live i just want them really bad. so i cant justify buying them. i do that with every purchase.

now im just over it.

Kudos @ your ability to save - and I thought I'm a penny pincher :eek:.

Your saving ability is a GREAT skill to have, so keep at it. I think "you're over it" because you don't reward yourself. How about setting a path eg. if I could save $300 a week for the next 6 months, I'll get myself a DS and a game.

I have been in the "why am I doing this to myself (delayed gratification)" hole many times. My way of getting out is by getting a treat (something sweet & fatty :D), set up a (realistic) goal and achieve it. Find your way and you'll be back at it in no time.
 
and don't be thinking i've bought this in some way out hick town ... this is edge of inner ring in the 8th biggest city in australia - 10mins to cbd, 2nd biggest shopping centre in nsw, beaches, university - 5mins walk to train and shops - 2 hours to sydney. and was voted by lonely planet as one of the top 10 places to visit in the world.
ah that's Newcastle of course. Yes there is some damn good apartments in Newcastle that are near facilities, transport, shopping etc that I also think are under priced in the 200 - 250k mark, should see good rental returns and solid CG over the next 3 years. This is good advice, to pick up 2 units like this. Another option is to buy out in the regional areas, pick up 2 x homes for under $150, slap some paint on and rent them out for $200 + a week. ;)
 
ah that's Newcastle of course. Yes there is some damn good apartments in Newcastle that are near facilities, transport, shopping etc that I also think are under priced in the 200 - 250k mark, should see good rental returns and solid CG over the next 3 years. This is good advice, to pick up 2 units like this.

:D:D:D:D

both exchanged so can reveal that they are in adamstown - between the shops and the train station (5mins each way).

very happy. another 10 of those and we'll be laughing.
 
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