Young and stuck

[IFBB]

Hey guys, hope everyone is well.

For the past few months now, ive found it really hard to figure out where i want to go/be in the next few years - especially investment wise.

December 09 purchased a 2b unit 9km from the Adelaide cbd for $188k, which i thought was a pretty good deal. Ive set it up as IO, and have put $500-600 into the offset each week, as well as $100 to cover any negative gearing / insurance payments etc into another account which is purely for the home loan.

I have got to the point where i really have lost most of the confidence i had in the housing market (for the current and near future anyway).

I am fortunate, as im 23 and still live at home, and only have expenses such as my own personal bills/car etc. My wage is roughly $65k a year, and when HECS is paid off this year, i may have an extra $2-3k disposable income a year.

Property is my main love, but id also like to go into business for myself. I currently work in the fruit & veg industry, and would like to get involved in that. I also do love investing, so just putting money aside does bore me a little.

Is there any advice / personal experiences from others on the board who have been in similar situations? Would you sit and wait it out, buy and reno (for some quick equity), invest in shares?

Thanks for any help... very confused atm haha.

 

[zed_kid]

Title misleading? You are not really stuck, just unsure what to do? I do agree with you on the state of the housing market atm. I’m basically in the same boat as you, but I’m 25, I have been in the property game for 10+ years though mostly through my parents... my advice? Look for a good property with high rental demand that doesn’t cost you much to hold, preferably with some potential for reno / extension, if you can get the loan and service the debt, why not? In my 10+ years I’ve never seen rents go down on our properties.

I’m sure there are some exciting opportunities in shares / commodities atm but I just don’t have any experience in those markets, I prefer the beast I know

 

[whitegoodman]

generally speaking anything that does not provide an income return (rent or dividends) is speculation and not an investment, many people get unstuck confusing the two.

Im personally heavy in cash with a number of dividend investments. Its not a good 'trade' or investment in aussie property generally speaking imo atm. Then again any change in monetary/fiscal policy and or legislation etc can change that.

 

[Propertunity]

For the past few months now, ive found it really hard to figure out where i want to go/be in the next few years - especially investment wise.

You've got the cart before the horse. You need to figure out where YOU want to be financially and then work out the best investment vehicle to get there. This may or may not be property. It could be a business, the share market (for cash generation), or property or all of the above to some extent.

You need to do your goals list first. This can be hard. But if you don't do it, then you risk locking yourself into some strategy, property or otherwise, that ultimately does not lead to where you want to be.

I have got to the point where i really have lost most of the confidence i had in the housing market (for the current and near future anyway).

Look, historically Adelaide real estate goes through very long flat periods from time to time. That is the nature of the beast. It IS boring. (Actually on a side note, investing is supposed to be boring. You arrive at a strategy and repeat over and over. If it is exciting, then perhaps you are taking too many risks?)

However, having said that, they will be opportunities in your own back yard to do well in RE. Look for ways to manufacture CG for example. They still exist. Or look to other states that are in a growth phase (you may not feel comfortable doing that at your age and stage of life).

Property is my main love, but id also like to go into business for myself. I currently work in the fruit & veg industry, and would like to get involved in that.

There you go, that is one goal that need to be on the list.

I also do love investing, so just putting money aside does bore me a little.

Personally, apart from my first PPOR as a 23 yr old, that was the last saving I ever did. It does bore me to tears too. But I can get deep in debt for investments and work my butt off to service the loans, that I can do - it works for me

Would you sit and wait it out, buy and reno (for some quick equity), invest in shares?

Sometimes you need to do nothing. Sometimes doing something is the wrong thing to do. Yes, I would manufacture some equity. Yes, I would learn about shares and options & CFDs BEFORE committing any funds to them.....but first that goals list.

 

[IFBB]

Thanks Propertunity!

I really need to see where i want to be in 5-10 years time. Im stuck between staying at my job, and saving for more IPS over say, 5-7 years, or to save for a few years more, and then try and venture into my own business/buying into an income producing business.

Doing the latter would mean holding off property for a while, or maybe only doing a reno / purchasing 1, instead of say 2+.

Why im stuck is because property would be a great way to increase equity, which could be used to purchase a business down the track. If it were 2005, i could say id stick to working, and heavily invest in property - but those 5 years are long gone, and i dont see the next 5 being anywhere near as fruitful for us property investors (be it im a novice ).

For now, ill stick to my plans of my reno in March 2012. Hopefully spend around $10k for some floorboards, paint, and tidy up the kitchen/bathroom. This will help add some equity/increase rent. If all goes to plan, ill begin the search for a run down IP in a bluechip area, which i can reno, and add some quick equity into it.

This was also an outlet to have a little vent at being in this situation. I dont really have anyone around me who is interested in this game

 

[Elfi]

IFBB i feel ya man.. Im same age as you, own one IP and am sort of stuck at this stage of my life in terms of what do i do next.
One things for sure dont be doubtful and say that the next 5 years in property look grim. The doubt is for the 'other' people in the world. We are investors in the property game and understand that there are always good oppurtunities in property no matter what the state of the market is at. IMO that is what seperates 'Us' from the 'others'.
I have personally chosen the renovation game with my first IP and am renovating it as we speak. As i live at home and rarely go out i have found i have the time and funds to undertake such a task.
You sound like a hard worker and im sure you will be successful in whatever you choose to do. With youth on your side, and the added benefit of living with the folks i will go against the grain and say take a chance. Wether it be in business or investing, give it a shot.

Goodluck

elfi

 

[IFBB]

Someone who knows what it feels like

I agree with you on the taking risk part. Im very fortunate to have a family who has always put me first, and will cover my back if anything happened to not go my way.

I too feel the renovating game is the way to make some money, so will undertake it on my first IP when my tenant goes back to Cambodia after finishing his PHD. Id like to learn a little more with it though, am pretty useless with my hands - lucky the family is full of builders / tradies though haha.