Young investors - tell all

[alexlee]

They weren't wrong were they?

I love it - how about you? Although I work in Sydney, I've only bought in SEQ (where I've lived for over 15 years, and think I sort of understand it).

When I kicked off, Bne property was returning 8 - 9% (that was 1999) and the best was yet to come. Today, of course, returns have sunk (as values have screamed upward) to 4 - 5% Par for the course, I guess.

In retrospect, yes, it was a great time to buy, and turned out to be a great start for a newbie like me. I didn't buy before or even at the start of the boom, but managed to catch the back end and still made some good gains. I had the same experience with my perth house: bought it for $165k in 2003 (after the same properties sold for $120, $130k in 2001-2) and now it has to be worth around $250k+. Buy the unloved markets. Wait until people really start deserting the eastern states and Sydney market tanks: that will be a great time to buy.

My IPs are now sitting there waiting for the next boom (and most likely a bust in between).

Partly because I saw what returns were like back then, I'm very wary of the low yields now (especially in Sydney - I saw 3% yields back in 2002 - 2003 and thought, 'These people are nuts!'). I'm especially worried for people who have only seen the last couple of years' markets, and thinks 3-5% yields are the norm. My Perth IP yields about 3.5% based on the market price, and that's nuts. I'm going to get it revalued and get a LOC.

To be honest I don't see myself living in Brisbane. It's a great place, and I'm sure I'll visit often, but I grew up in Sydney, and want to live in Sydney for the long term. I'd like a summer house on the Gold Coast, though!
Alex

 

[sue78]

I lived in Sydney for awhile and loved it. I really missed Sydney so went back there for a holiday a few weeks ago with baby and yeah, definately can't see myself living there now.

Brisbane is better to start a family.

 

[tara]

Young investor in SA

Hi guys (sorry for starting a new thread!),
I am 24, and bought an IP Nov '06 for 205,000 in SA and it was recently valued at about 250,000, so I am using the equity to buy another place.
I am currently looking, and have become quite frustrated by numerous family members coming out of the woodwork and voicing their many well meaning, varied opinions on what I should absolutely not buy.
Recently I looked at an amazing place built in 1993 which is on the market- the agent told my Dad that someone had committed suicide in gruesome circumstances in the house, and my Dad thinks I should not put an offer in.
Am interested to know people's thoughts on this- I believe this is tragic, but that a house is an inanimate object.
-Tara

 

[Rob Williams]

Tara, only YOU can answer that one. If the numbers stack up and the agent is putting people off buying the property with this story, then it could be a great opportunity for you.
My well meaning Dad told me not to buy a bluestone cottage in Unley many years ago for $30k because it had a little bit of salt damp. You can guess what it's worth now!
Go with your instincts. Do your due diligence. Work the numbers.
Good luck and stay POSITIVE!!!

Rob

 

[tara]

Wow Rob! That's amazing! Just goes to show if you've done your research you really have to trust your gut.
-Tara

 

[knightm]

FWIW If you are gonna hold long term I think people will forget those kinds of things. There have been cases where agents get sued for not disclosing that stuff so they will all be very open about it. In a number of years (?how many no idea) the media will move on and it will be just another house. If you want to sell soon I wouldn't touch it.

 

[SirR3D]

My little story.

I wanted to buy a house when I was 18 (now 26) however at the time I had 20K deposit but would not have been able to afford the repayments on the salary I was on.

Fast Forward......

I blew the 20K, now I think back and think I was an idiot, actually I knew I WAS an idiot. My salary was stagnent untill 1 year ago when I worked my **** off to being on 4 times my old salary. My partner did not want the responsability (as she is 23) of owning a house but after being kicked out of multiple rentals and then not being able to find a rental because we had a dog we looked at buying.

We found a nice place 14 months ago in Forest lake where we have lived for 4 years, love the area and not only that but someone elses contract fell through and the owner sold it to us for $25k under what all the other places were going for at the time.

We bought our first home for $285K 14 months ago as mentioned above, soon after (12 months) the house was getting too small with all of our furniture and when our friends or family came over it felt too small so I decided to look for a bigger place, my now wife did not even want to look at this property that I had lined up for a viewing as she, once again, did not want another house. After viewing it fell in love with it and bought it (settled whilst on my honeymoon LOL)

We bought that house using the equity in our first and now have the other as our first IP

We now have a total of $890K (approx) worth of property within 12 months of buying our first.

2007 - $285K, now valued at $345K
2008 - $545K

Well sorry for the long post, I just can not beleive how good it feels to build my portfolio and security for our families future.

 

[Alex P Keaton]

The mortgage broker visited last night and we worked out a plan.

Being a fhb and also on a low income I cant afford to buy an ip and rent somewhere else msyelf like I was planning to do. Its just not feasible at this stage.

I am going to rent the property out for 10 months and live at home with my parents then move in within the 12 month period to claim fhb grants. This property will be my ppor for a few years (will have an interest only loan) and when I can afford to I am then going to turn it into an ip and rent elsewhere. Hopefully I can do so after living there for around 3 to 5 years.

 

[george72]

The mortgage broker visited last night and we worked out a plan.

Being a fhb and also on a low income I cant afford to buy an ip and rent somewhere else msyelf like I was planning to do. Its just not feasible at this stage.

I am going to rent the property out for 10 months and live at home with my parents then move in within the 12 month period to claim fhb grants. This property will be my ppor for a few years (will have an interest only loan) and when I can afford to I am then going to turn it into an ip and rent elsewhere. Hopefully I can do so after living there for around 3 to 5 years.

You need to live in it for 6 months within the first year:

"As this grant is not intended to be used for the purchase of an investment property, we will ensure that grant recipients have resided in the property for 6 months and within 12 months as their principal place of residence."

http://www.sro.vic.gov.au/SRO/srona...04420CF-FFEFCD2ABA129376CA2575CB0001A2F0?open

 

[george72]

I'm 27.

I completed uni when I was 21.

Bought my first property when I was 22 in 2004 in Perth. It's a 3 b/r house. I borrowed $184,500. The property is now worth $330,000.

My second one was in the Southport, Goldcoast in end of 2005. It's a 1 bedroom unit. I borrowed $160,000. It's now worth $220,000.

For my third property in Feb 2008 I extracted some equity from the first and also used some to buy shares (portfolio is about $22,000) and some other investments. The third one is in Brisbane and is a 2 b/r townhouse. I borrowed $230,000. It's now worth $260,000.

My forth is my PPOR. It's a 2 b/r unit north of Melbourne. I bought it for about $300,000 5 months ago. I got a loan for $250,000.

I've learnt a lot during the whole process and there's still heaps to learn. I started off just because my Dad was encouraging me to invest. I'm now really interested in investment and really enjoy investing and learning more about investing. It hasn't been all smooth sailing. I have lost some money in some dodgy investments but it helped me to learn what not to do and how to manage risk. Another thing I've learnt recently is to not put all your money in investments because opportunities come along and if you don't have money then you can't take advantage of them. Also it's always good to have money in cash if things go wrong.

 

[AndrewT]

I'm 23, my partner is 20.

We bought our first place for $345,000 in South Western Sydney. It's a 4 bed house, we borrowed $293,000 to get it. It is currently being rented, not sure what the market value is at the moment. We will move in, renovate a bit and move back out to my partners parents house.

Our next IP will be purchased some time next year, not 100% sure where yet though. We have been thinking about everywhere and anywhere, it will probably be around the $250,000 mark.

So anxious at the moment to get into the IP market and start buying properties. There is only so much reading you can do!

Alot of inspirational stories here, great to see so many young people investing! Should start a young investors group

 

[Nathan]

I am 24, and started at 18. Tried to buy @ 13 but couldnt get mainstream funding.

 

[Lynchy]

I'm 22 and gf is also the same age

Brought my 1st IP at 21, 9 months ago for $340,000
$300,000 loan. Now valued $400 - $415,000 and renting for $400 a week. Could probably push $425 but tennants are good and friend of a friend

Gf brought her apartment a month ago and we are currnently renovating it
Purchase for $230,000. Value after changing it from "Purple Title" to strata would be around $280 - $290,000. Will rent for $275 a week

$500,000 debt
$680,000+ value
$675 a week rent

Living in between parents and gf's parents house rent free

Looking to purchase again in the next 6 months

 

[Hados]

I'm 24...

Bought a house at 18 with my then girlfriend (silly move) and broke up 3 years later. She bought out my share for a nice little profit that enabled me to pay out my car loan.
I then purchased a neat three bedroom house from a family friend for $130,000 18 months ago after living with mates for a while. Currently living there as my PPOR with 3 others who are paying me a nice amount of rent House is now valued at $160ish.

Decided to bite the bullet 4 months ago and looked at a house with reno potential that was being leased to the local meatworks. House has pink, green and blue walls, old carpets and is an awful shade of green on the outside... It was built in 1900 but is solid and stable and will do up a treat. I offered $20,000 under asking price (at a stab) and settled 30 days later with a tenant who is comfortable with the condition of the house and paying me WELL above average rent

Current situation
PPOR valued at $160k, with $122,000 loan remaining (boarders paying $160/week)
IP 1 valued at $160k with $150,000 IO loan, renting at $200 week

Not sure of my next move yet, thinking of buying another in the next six months, will see what pops up

 

[Lil Skater]

hi..the occassional pop in of little sk8er

well i have 0 properties and 0 shares...there is a problem with this picture...ahuh i'm 14 so i can't possibly own any (stupid laws!!). Although i have a part time job and save half or over half my wages every week. I have two parents whom both invest and are very dedicated to their "work" you could say. So slowly i'm learning the bad and the good since i live with them it's if they suffer a loss so do i, so i must learn in return. I'm planning to start my portfolio as soon as i'm 18 and have a deposit and go from there.

So i'm planning on getting my help from my parents and probably alot of you guys and of course our friend Rolf L. hehe I think in a couple of years once i get organised and on my feet i'll have a steady portfolio and i'm planning on retiring before the age of 40-50 depending on how organised i am and by the age of 30 having a portfolio of at least 15 IPs. Crossing my fingures HOPEFULLY!!!

cheers and i'd appreciate peoples thoughts

Gosh, how funny!!!

This thread is over 3 years old!

Anyways, point being that was me at 14, now i am 18, and like i said i was going to do, i have a great little deposit for my first house, although i'm not sure about having 15 properties by the time i'm 30, but i'll try..

Just thought i'd fill everyone in since this popped up haha!

 

[Rags]

I am 31 and only have 3 IP's under my belt(bought my first 1 at age 22,30 and 31 so wish i kept my head in the game through my 20's .I take my hat off off to all you young guy's and gal's and totally amazed at what some of you have achieved so early in life.Hopefully by reading these forums this old dog can learn some new tricks.

 

[tess85]

I am 24, hi to all the other young investors out there

Just sat down to do a rough estimate of what has happened in the past 9 months since I bought my PPOR and started the property investing journey!

In February, we had a net worth of $120k. Used this most of this deposit to buy PPOR (settled in Feb).

Today, net worth of $240k ($60k due to increase in PPOR value, and $60k increase due to my husband and I saving every spare penny we have, for the next IP deposit) We only made IO repayments, which is why we could grow our cash buffer so much.

I don't have any IPs yet though, so I'm looking forward to the slow and steady approach of accumulating properties my goal is to buy 1 every 12-18 months so I'd better get cracking...

 

[Rob Williams]

I don't have any IPs yet though, so I'm looking forward to the slow and steady approach of accumulating properties my goal is to buy 1 every 12-18 months so I'd better get cracking...

Just as well you're going for the slow and steady approach
What would the fast track approach look like, I wonder?

 

[tess85]

Haha, I had envisaged a fast track approach being like a Nathan-type approach - 12+ properties in goodness knows how little years... which I don't quite have the guts for, but hats off to those who have managed it

 

[doozer]

I'm 33 (some wouldn't consider that young anymore).

1. I bought my first house in Bundaberg in 2002 for $89k
Did some cosmetic renos and moved out a year later. It rents today at $240p/w

2. I used the growth (equity) in this place to purchase a new OTP townhouse in Nerang in 2003 for $189k. I used equity from growth in this property to invest in blue chip shares with a margin loan.

3. In 2003 I again used equity to purchase another (colonial) house in Bundaberg for $195k

4. In 2004 I then purchased a OTP townhouse in Springfield for $239500 which rents today for $325p/w

I then got divorced and I lost my 2nd & 3rd purchase plus share portfolio in the settlement.

5. In 2006 I purchased a OTP villa in Burpengary for $249k which rents out today at $290p/w

6. In 2007 I purchased a OPT apartment in Mt Druitt for $259k which settled this year and rents out today for $300p/w

I managed to get back into shares with a margin loan and it sits at about $42k with a regular gearing plan each month reinvested. I have about $45k cash which gets added to each year from my tax refund.

I use only 5yr fixed interest only loans and employ property managers for all the properties.

I currently rent in Brisbane.

I have used the same company 3 times to purchase from and will continue to do so. The best book I've read on property investment is Fred & Brett Johnsons The Wealth Power of Property.

I don't subdivide, nor do big renos. I've never sold and will only consider so if I fall on desperate times or consider selling in retirement to fund a lifestyle.
I'm a public servant and earn just over average.

I find other people's stories on here inspirational and have used the forum extensively in my decision making.