Young Investor - Building Solid Foundations

[Felix]

Hey Everyone,

Long time lurker, but haven’t been posting much. I've finally got myself into a position to dive head first into the property market and wanted to openly discuss some options.

Brief background
I'm 25, and recently come back from a gap year (get the travel out of the system whilst I'm young). I've settled into a good job on the Sunshine Coast (QLD) and am currently saving significantly. I haven’t plenty of opportunity for promotion and within 10 years aim to be earning 200k+ per year (salary).

I own 50% of a property worth 500k (400k owing) that is neutrally geared.

I am currently saving $3,500 a month (earn 100k a year) and have $20k saved up thus far for a deposit.

The aim is to acquire a property per year (more if possible) that are neutrally/positively geared. I am aware that the days of 10 year cycles are somewhat behind us, therefore more creative methods need to be utilized.
I work in construction (project management) therefore I am comfortable with developments/subdivisions etc... but don't have much experience with small scale projects (houses/units etc...).

I have spent the last 2 months researching into the northern side of Brisbane and am actively looking in around Chermside. However, on the flip side I have been considering apartments in the CBD (little maintenance, hold and forget).
Below is a few of the options I'm exploring
- Subdividing blocks
- Build a granny flat
- Convert to dual living
- Regional CF+ areas
- Block of land and build a house/duplex/villas

As a general note, I've only been looking for properties with potential for improvements (to increase return/equity).

I feel that I'm looking too wide, and that I should pick a strategy and stick to it. I am also open to the idea of shares/metals etc...

I'm meeting with a 'property strategist' next week to discuss options and hopefully tailer a system that suits my situation.

I have little knowledge about setting up trusts etc... but feel that whilst I'm at the beginning of my journey, I should build the foundations correctly (apologies for the poor thread title).

Additionally, I don't want to leverage myself up to the eyeballs so that I sit stagnant for 5 years waiting for either a higher salary or the properties to increase in value.

I realise that this post sort of jumps all over the place, but I just wanted to throw my situation out there and hopefully some experienced players can provide some insight as to what they'd do in my situation.

Thanks in advance!

Felix

 

[Ace in the Hole]

Hi Felix,

I think you just have to keep doing more research and look at what options are available.
Look at your strengths and where you believe this can advantage you.
A lot really depends on your investing personality and risk profile.
I really don't believe anybody can answer this question for you as everybody's situation is different.
The worst thing you can do is do nothing.
The best thing you can do is make a start and if you make a mistake and take a setback, learn from it and get smarter and stronger and even more determined.

Good luck on your way.

 

[Charlotte30]

Building solid foundations

At the beginning of your investment journey there is so much choice and no experience. As you gain the experience the choices going forward will be different. No one can teach you this. Do what you can with what you know based on your research. You don't know what you don't know until you start.
Cheers
Charlotte30

 

[travelbug]

Hi,
you don't necessarily need to choose a strategy and stick to it but you do need to pick which one you'll start with. Your ideas, knowledge and cercumstances will change over time, and so will your investing.

If you buy things where you can manufacture equity and that give decent yields you can keep going indefinately. Cashflow is what stops you. I'm not suggesting regional BTW. You can buy undermarket properties that need a reno for example. A small reno can add equity and result in a CF neutral or + property.
Remember everything you buy should get you closer to your goal- which is???

It might be a good idea to post what the property stratagist suggests for feedback from others with a wealth of experience on here. Make sure the strategist is not selling properties themselves (conflict of interest). Ask them what property they own and where they invest. You'll find a lot that do not invest in property themselves but have read the investing book.

Had to laugh about you getting travelling out of your system. I've been trying for 50 years (hence my name). Can't beat it.

P.S I'm not trying that hard really. It's my number one passion (property is number 2).