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Introduction, and why is it so hard to 'do something'.....

Discussion in 'Real Estate' started by peterpan, 24th Aug, 2009.

  1. peterpan

    peterpan New Member

    Joined:
    24th Aug, 2009
    Posts:
    3
    Location:
    Melbourne, VIC
    Hi all,

    Allow me to, before anything, introduce myself.
    I'm a 28 year old IT professional. I live with my partner and 18 month old son.
    We're currently 'renting' a property that I am buying with my father. The house is under his name, but we're both buying it as an investment.

    At the time I had a low-paying job which wouldn't have contributed much.

    I have since moved on to a better possition and have a small amount of money saved.

    I have always feared the idea of investing.
    Maybe more the idea of 'change'.
    Particularly of our standard of living (albeit not great) the fear of unkown has always stopped me from 'doing something'.

    I have always thought about purchasing a property as an investment, living in it for a while, maybe subdivide (if possible) and build on that..


    At the moment the banks are telling me that I'm capable of borrowing up to $650,000.

    The thought of that much money is something I'll never be able to understand.
    How could I possibly pay so much back??!?

    I have approximately $15,000 in savings.
    Just sitting there, waiting for me to do something with it.

    Would real estate be a good (safe) investment?

    I'm thinking I'd spend approximately $250-$300 thousand on a property to build on.

    Is it a good time to buy now (around the Melbourne area)? I know it's not much money, I know I come here without much knowledge..... But I need some sort of push or drive to get me going.... Else the $15,000 I have will turn to much less. :S

    (actually -- I have some US dollars, too..... I'm just waiting for their dollar to go back up, or ours down..)
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    First question when it comes to buying real estate is - how much can you realistically afford to spend each month servicing the loan?

    Have you done a family budget to identify your expenses and how much cash you can free up without impacting too much on your lifestyle?
     
  3. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney
    Hi there

    Taking the first step into any investment is a big decision, and one that required examination and diligence. Sim is right on with his questions- cashflow is all important, especially if you're not saving any money right now. $15K, I regret to inform you, is probably not sufficient for you to invest in RE just yet. Even if you qualify for the FHOG there's still stamp duty and legal fees to pay. Most lenders are tightening up on 95-100% lends now as well, so you may want to speak to a broker first to see realistically how much you can borrow.
     
  4. peterpan

    peterpan New Member

    Joined:
    24th Aug, 2009
    Posts:
    3
    Location:
    Melbourne, VIC
    Hi there.
    Thank you for your replies.
    I suppose it's sad to say, but you're right.
    Albeit $15,000 being all my savings, it isn't particularly a lot of money these days. :S
    I suppose that's one of the reasons I want to do something with it - so it doesn't turn into less.

    Perhaps I could have built on my question further:
    I currently am buying the house I live in and can take out on its equity.
    My dad also has a house which he's buying, in which he has equity built into as well, which, albeit not really wanting to use, can become available if necessary.

    I've not yet decided as to whether to buy the IP under my name or my dad's and save my FHBG for the next property, or if I should move in to the property and rent out the one I'm currently living at....

    In any case, I'll be visiting with a broker to discuss things further, hopefully in the next week, but wanted to come in and get some sort of indication as to whether I should buy, wait, seize the day ...... Or something like that..
    I hate the thought that houses were so cheap at one time, and now they seem to be ridiculously expensive .. And I hate the thought that I might have a chance to buy something today, and if I don't, in five years' time I'll look back and think how much I could have made..
     
  5. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney
    Hi Peter

    How did you get on with the broker? Hopefully he was able to assist with structure and your questions. Naturally, if you have access to equity then that changes things. Would like an update if you have time.
     
  6. peterpan

    peterpan New Member

    Joined:
    24th Aug, 2009
    Posts:
    3
    Location:
    Melbourne, VIC
    Hi there,
    Thanks for touching base.
    Unfortunately I've not had the chance to meet with him as yet. He has been overseas and will be until next month, so I guess I'm stuck until then.
    A shame, as I saw a property which seemed to have great potential for a reasonable price.

    I would have some equity saved. Perhaps $30,000?
    I bought the house where I am at only 2 years ago, so am not exactly sure how much would have accumulated..

    I suppose the next thin would be to wait for my broker to return to Australia and take it from then, and hopefully we'll hear some good news!

    again, thanks for touching base and I'll certainly post my news upon enlightenment.