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My intro

Discussion in 'Introductions' started by r0dman, 11th Nov, 2008.

  1. r0dman

    r0dman New Member

    Joined:
    13th Mar, 2008
    Posts:
    2
    Location:
    Adelaide, SA
    Hi everyone,

    Long time reader, first time poster.. I thought I'd write up an intro to myself as it's time I get a bit more serious about investing.

    I'm 24, engaged, with both of us living at my mum's place (luckily quite a big house). We bought a block of land last year for just over $200,000 (acreage in Adelaide Hills). We were looking for it for a while and believe it was a good purchase. The plan is to build one day but not just yet. We were lucky enough to be able to organise a 20% deposit on the property and cover the fees and charges from a deposit we had saved and from selling my car (some sacrifices are worth it!). This left us with a loan of around $165,000. It's an interest only loan linked to an offset account, and after saving hard and selling my other car this year, one year on we have about $90k more paid off.. $75k more to go!

    Our plan was to just pay off the loan ASAP, then we'd go overseas as a reward, come home and maybe buy an apartment or unit to live in for a year or two, then build on our property and rent out the unit.

    Although both of us are on contracts, we are both in quite secure jobs and earn fairly good money, so borrowing more at the moment doesn't concern us too much so long as it's manageable. The FHOG has me keen to do something. It's a large sum of money now, and we're tempted to buy an off the plan townhouse/unit/etc, live in it for 6 months (I believe that's the requirement now) and then rent it out.

    I know this is incredibly long winded, but I value your opinions - what would you do given our situation? We aren't massive risk takers, but neither of us want to be working at 60. We don't have an expensive lifestyle, free time is what we crave.

    Thanks:D
     
  2. bella

    bella Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    48
    Location:
    QLD
    Wow, that is really good saving! Well done, I think if you can keep that up you will have no troubles whatever you decide to do.

    I only have one comment;

    I don't think it is an easy task to convert a PPOR (the unit) into an investment property and then move into another PPOR immediately from a tax point of view. Perhaps consider renting during that time, or buy one investment unit and you live in another rented unit. see: http://www.invested.com.au/3/need-refinance-convert-ppor-ip-31512/
    EDIT: It is ok but you need to structure the loan right from the start, interest only loan with no offset I think.
     
  3. r0dman

    r0dman New Member

    Joined:
    13th Mar, 2008
    Posts:
    2
    Location:
    Adelaide, SA
    Thanks for the advice bella. I have come across this before and was under the impression that an interest only loan linked to an offset account is the way to go, that way you can use the money from the offset for personal use.

    There's a ton of info here, I'll have to do some searching. We'd literally buy the unit, live in it for 6 months and then rent it out, so if it's costing us more in interest for a few months it's not the end of the world. The reason we want to live in it is to get the FHOG..