So I've bought my first property..

How much is 'not much' ..?

I'd like to be able to put as many extra repayments into the loan in the first few years as possible.

And yes, I understand some people may find it a little ignorant/stupid not to take out insurance, but my mother has never had any type of insurance her entire life, and we've been fine up until.

I also know plenty of other people who have never had insurance and nothing has happened. Of course this isn't to say it can't/won't happen to me, I'm just merely saying I should be ok to go without it for a couple years and give myself the oppurtunity to get more ahead in payments.

Of course, i'm going to read over my strata report and make sure that I have SOME kind of cover in the even where the building may collapse or burn down to the ground, because in that case the variables aren't just myself, its everyone else in the block, so the chances are multiplied by however many other people are in the complex.

And if they aren't the sharpest tools in the shed, well then it multiplies again.

Many thanks for all the advice, I didn't know insurance covered so many areas.

 

Not sure if i overly like the property..

 

The chances of that happening are quite slim.. Next to none in my opinion..

I think I'll be fine for a couple of years without insurance..

If worst came to worst, are you all taking into consideration the fact that I could just sell up..?

I personally think I got the place at a good price, after a layer of paint, maybe a bit of fresh carpet/tiles it should go up in value a bit, not to mention the general value of the area going up, I think I should be right.

 

Sk3tChY

You will be fine, just take out the landlord's insurance and check out the contents part as well.
It doesn't seem like income protection is needed in your situation.
The extra repayments will be like money in the bank for you.
Additionaly, if you ever run into financial trouble you can always access your super.

Cheers

 

Thanks BV..

 

congrats on your place.

what made you buy in caringbah if you dont mind me asking? if parramatta seemed like a better investment?

its not a bad little area around there.

 

Wow - what positive and useful feedback.

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Sk3tchy, well done on a purchase - as others have said you're way ahead of the game.

As you get older (hopefully much older) you'll notice people going through tough times, cancer, heart attacks, car accidents, accidental death, other disability, lost job and difficulty getting another, sick kids, lost partner etc. At that time the risk avoidance strategies people have mentioned will sink in and you'll see these as essential - any financial plan generally recognises both your capital and your income to support the plan is crucial - and the insurances required to protect both capital and that income no matter what happens are then seen as a given, and the costs (usually tax deductible) will seem like a pee in the ocean. It doesn't appear anyone can convince you all these things are necessary right now, but keep them in mind, because there are always plenty of examples of people who wish they purchased insurance when they had the chance.

If it was me (bearing in mind I'm twice your age ) I'd rank in order of priority :

a) Prepare a Will (might as well give something back to Mum and Dad if you're gone ) and Power of Attorney (so someone can make decisions if you have tubes sticking out of you for 6 months)
b) Building insurance - given the asset value and minimal cost including Public Liability for the burglar who breaks his finger trying to smash your window and then sues you ;-)
c) Income protection (keep paying all bills so the bank can't sell your unit out from under you for much less than its worth)
d) Death and Total and Permanent Disability Cover (if you are completely disabled, nice to afford some choices)
e) Cash buffer (maybe thru advance loan payments) to ride out blips before any of the above apply
f) Private Health Insurance - depending on how good your local public hospital is

At your age that lot (excluding private health) might cost less than $2,000 per annum and all be tax deductible and some able to get taken out of super or pre-tax salary. I do understand why you'd prefer to see that $2K paid off the mortgage, but you have to be supremely confident you will never be one of those young people who runs into any kind of unfortunate circumstances.

Insurance you pay but don't claim on isn't wasted, it's like waiting to cross a busy road at the traffic lights instead of bolting across 6 lanes with no lights. Both might get you to the other side of the road, just one is likely to be a lot messier if things don't go well

I agree eventually you could get tenants in etc. to costs while you are hospitalised etc. but you might still find the place was sold out from under you before you got a chance, if something dreadful happened.

Either way, at least you have something to lose now ! ;-) So nice work - and good luck with the move.

Cheers
Carl

 

Haha - just being honest..

 

Hopefully Sk3tch doesn't care about your like or dislike of where he will be living. There is another forum to make pointless digs to drag people down, I think a lot of people appreciate InvestEd for more advice, less opinions (at least if the opinion is not relevant to the question asked).

(Admittedly the carpet being replaced with laminated floors or tiles might make it look prettier, but Amy Winehouse can look really good or really bad depending on how much time they spend cleaning her up, she still has a good voice, which is all that matters ) - that admittedly is an opinion, not advice ;-)

 

Heh.. nice one try hard..

Yeah, I know the place is rough around the edges, but thats exactly what I wanted.. Thats why I got the place at such a good price..

And yes, the carpet is horrendous.. That will be one of the first things being fixed up. My best mates father is a tiler and will be tiling the whole place for me quite cheap.. And my own father is a painter by trade and so he'll be repainting the entire place for me.. Should turn out a treat I hope..

I'll be sure to post before and after shots on here later on for those who may be interested.. Once the renovations are done I may consider getting a re-evaluation thing done to see how much gains I've made..

How much do these types of things cost? Where/Who does em?

 

Sk3tchy

For a general guide, a decent local RE agent or similar will give you a good idea of value.

The bank valuers will always value low to protect their interests.

You can also engage a Registered Valuer who would cost around $400-$500 but then you'll get a lot of sales evidence to support their valuation (I usually only engage them when I want to try to get the bank valuation as high as possible, because with your own registered valuer's figures you have a chance of proving its worth more than the bank tries to claim. It's worth spending the dough when you are desperate for more borrowings, as I often am

You'll be amazed at how much difference the paint and tiles will make (well you probably won't be amazed, because you're already planning the changes you must already know how good it'll look ) The before and after pics are a great idea.

Cheers !

 

Yeah.. I get addicted to them renovation shows.. I used to watch this one called Auction Squad late at night at work on night shifts and it's truly amazing what a fresh bit of paint can do to a place.. It'll be awesome..

And the tiles will make the place look so much better.. The carpet in there atm is horrid..

Thx for the info on the valuers..

 

Firstly, I wish you the very best of luck with your investment.

But I have to say I've bookmarked your thread as that 'shoe shine boy' moment in the housing bubble.

 

I don't get it?