Younger Investors Experience

[ldc12]

Hi All,

Just started investing last year with a property in Soldiers Hill (Ballarat).

Still in my early 20's and was wondering if anyone on this forum can give their experiences of investing at a younger age. I say a younger age because i am still on a relatively lower income as many others at my age would be.

Any advice and experiences would be great.

Thanks
ldc12

 

[spludgey]

There are a few threads relating to young people or people with relatively low incomes investing on here. Just do a search and some should turn up.
It's best to start early! I wish I had started five years earlier.

 

[Hados]

What sort of information are you after? Like spludgey said- there's a HUGE amount of information on the site. I started young and am still on an average sort of wage. Don't let it stop you

 

[tobe]

I started young, and in Ballarat, on a low income. Im no longer young.

Make a friend of time. Learn. limit non investment spending.

 

[ldc12]

Hi All,

Thanks for the replies.
I will continue to search through the forum.

Just quickly can anyone give their experience on how they went from 1 to 2 investments. I ask this because i will be planning on using equity and cash from my first investment. Does this seem wise or should i aim to use cash only?

Also do many of you use 10% as a deposit or wait to reach the 20% mark.

Thanks

 

[Peter_Tersteeg]

Younger people tend to have a more aggressive investment strategy. For the deposit on IP 2, probably the fastest strategy is to use both equity and savings. You can wait longer for the equity to get to the point you need, you can wait for your savings to get there, or you can speed it up using both.

The other half of the equation to get the next IP is affordability. This is highly dependant on your personal income, rental income and debt levels. The best way to work this out is to discuss it with a mortgage broker.

Also investors in a more aggressive aquisiton path will tend to use 10% deposits over 20%. Whilst it means they'll have mortgage insurance costs, it also means their equity and savings go further.

 

[Darlogus]

Hi All,

Thanks for the replies.
I will continue to search through the forum.

Just quickly can anyone give their experience on how they went from 1 to 2 investments. I ask this because i will be planning on using equity and cash from my first investment. Does this seem wise or should i aim to use cash only?

Also do many of you use 10% as a deposit or wait to reach the 20% mark.

Thanks

It all comes down to what your trying to achieve and by when. If you want to grow your portfolio quickly then it takes time to save for deposits.
The danger in a growing market is you can't save as quick as property goes up in value. My opinion is buy when you can but don't overcommit yourself.

 

[7smurfs]

As others have stated - a combination of equity + savings is required to continue purchasing up.

Also helps if you don't end up moving into one of your IP's to enjoy the lifestyle.....

 

[alexlee]

Part of it is determining how aggressive you can afford to be. This depends on your job (how secure it is, or how easily you can find another one), whether your income is likely to increase, what your spending is like.

In general, the younger you are the more aggressive you can afford to be. That means lower deposits.

 

[alexlee]

As others have stated - a combination of equity + savings is required to continue purchasing up.

No, you could just have higher savings. As a single person living at home, aim to save 70% of net (less board). As a single person living away from home, aim to save 50% of net.

Also helps if you don't end up moving into one of your IP's to enjoy the lifestyle.....

One solution is to buy IPs in areas you don't want to live in. They'll be more objective purchases.

While younger investors (obviously) have more time than older investors, the clock is still ticking. As you get older there will be more demands on your money.

 

[Hados]

I started out by buying my own house to live in and renting out the remaining rooms to other people. Essentially it was a PPOR with other people paying my mortgage. This helped me to put as much of my own money into saving for the next deposit for another IP. Adding my savings and a bit of time and capital gain, I was able to purchase my next two in reasonably quick succession.

 

[Deltaberry]

Not much different from what an older person would do?

 

[see_change]

Probably easier to take a bigger risk at a younger age, because you have more time to recover if you make a mistake.

when you're older , you're more likely to have equity which can enable you to move quicker with a larger buffer and higher income , but if you stuff up it would be painful to start again ,

cliff

 

[Moneyman_85]

I'm young, well 28.

What made u buy in ballarat?

Just asking because I have no idea where to start buying, but I am reading a book about how to research an area properly.

John.

 

[Jacque]

I started young, and in Ballarat, on a low income. Im no longer young.

Make a friend of time. Learn. limit non investment spending.

I love it Well said.

Well done on starting young- I was 23 when I bought my first IP and that was a while ago now Lessons learnt since then have been many, however first and foremost don't over-extend yourself. Secondly, listen to those wiser (not always necessarily older however!) and more experienced and thirdly plan for the worst-case scenario. Everyone needs an exit strategy. Happy purchasing!