Buying first home, while looking into the future.

Hey guys.

My fiancee and i are getting married at the end of June 09 so we need a place to live. So we want to purchase a free-standing house in the western suburbs. This is with the help of the FHOG, and with the 10%+ deposit we have accumilated.
We are just starting out, but i am also very keen to eventually own investment properties as well.

My question would be is there anything particular we should be looking for with our first home when thinking ahead to investing in property.
For example would it be best to move out of the house we will buy and rent that out? Or look for another home/unit to purcahse and rent out?
If moving out, then should we look for a home that has particular features that helps maximise future rent?
Thanks
Welcome ANY advice.

 

I think most important advice in these tough times is not to over extend yourself. If you are serious about investing in the future then the golden rule about making money is living within your means. This is the only thing that will fast track your ability to invest.

 

When I started out I did as much as I could myself to make my house worth more. I learned how to tile and paint, hubby does the comcreting, paving gardens etc. we practiced on our own house to make it nicer and then when we started buying rentals we always bought the "duds" and did them up. From a finance point of view pay out your nondeductable debt as fast as possible. Then you can use the equity to purchase a rental. well that's how we did it anyway. read anything you can get your hands on. Michael Yardney, Anita Bell, Hans Jakobi, Pat Mesiti...all great authors.

Good luck and congrats on your wedding

 

Thank you for your advice.
Yes i am reading a few books. Currently reading Steve Mcknight's book.
When you say pay your non-deductable debt, you mean put as much into the house that we are living as possible to pay more of it quicker, and then after a while use that equity to proceed?

Yep i totally agree.
We are currently trying to be very wise with our money and stick to a budget.
Also the properties we are looking for are in a much lower bracket, then the ones that we were shown we could purchase when they did a preliminary pre-approval on the computer.

 

Sashatheman,

If you are looking at renting out the house that you are buying at some point in the future (even if it is only a possibility) have a look at one of the numerous posts on this forum about the advantages of an offset account (as compared to a redraw facility). This can save you a lot of grief, and provide more flexibility in the future.

Regards,

Jason

 

Thanks Jason

Our family friend is a broker and he suggested the best mortgage option for us that includes an offset account, wewill go with that option. So we'll definitely have an offset account once we find something we like.

 

Hi Sash

To add to some of the excellent points raised so far...

* In this market, ensure you conduct your DD and check out recent sales etc to avoid overpaying. There are currently some FHB's who are paying too much in their haste to get the grant (though it's now extended til Sep) which negates the grant in the inflated purchase price anyway.

* If buying for future IP purposes, select something close to the usual suspects ie: transport links, shops, schools, parks etc.

* Try to buy something established that has capacity to add value, rather than something brand new. Consider land size (can you extend or add a pool down the track?) easements that might affect future builds and landscaping, as well as house positioning. Try to also cater to the majority of buyers so that when it comes time to resell it's an easier job. Think high or level side of street, street appeal and frontage (battleaxe blocks can be a hard sell) level yards, side access etc. Lots of variables but I'm sure you get my drift

* Second the offset acct- only way to go.

Best of luck with your search- where are you looking and what's your budget?

 

Thanks Jacque

We are looking around the Blacktown and surrounding suburbs ie seven hills, lalor park, dean park, glendenning, marayong, quakers hill maybe rooty hills.

It's cheap but still not too far out west.

We try to stick under 340K houses.

 

Best of luck with it all Sash. At least it's slowed down a little (until Sep!) with the small extension to the grant.