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Andy | 25 Mar 2013, 10:09 AM Agree 0
Hi All,

I am beginning to start my property investment. I'm currently 21 and have a some money in the bank.

I want to buy a property near the western suburbs of Sydney (Mount Druitt / Surroundings suburbs) as the affordability out there is a lot greater than buying a unit in the CBD (300-400K) with more outgoings.

I am however a bit skeptical going out this far as i don't know the area well how how good it is out there. have been doing research and showing that most suburbs are close to all amenities (public transport/shopping etc)

As it is an investment with a high yield does anyone agree that this will be a good option?

Could i have some feed back / people who have experience and guide me through on getting started?

thanks!
  • Eos Property | 25 Mar 2013, 03:13 PM Agree 0
    Hi Andy,

    What are you trying to achieve? I know you said 'buy a property' but what is your underlying strategy, overall plan and broad outline. Having answers to these types of questions will help you determine whether or not the areas you are looking at are right for you.

    A couple of key points that may be of assistance.
    1. Make sure any out of pocket expenses (if any) are manageable even with a higher interest rate.
    2. Make sure you make decisions based on your research and what the numbers are telling you. Try and keep emotion out of your decisions and focus on facts.

    There are a number of investors who are looking at the areas you have chosen so you may well be on the right track.
  • Pauline klemm | 26 Mar 2013, 09:40 PM Agree 0
    Hi Andy, ignore the second response and listen to the first response, he had good advice.At 21 you probably don't have heaps,of disposable income and good on you for saving enough to start investing.You are definitely doing the opposite to most people your age and therefore will do well.
    Try and get a balance between growth and yield as you need both to progress. look at the areas economic drivers, vacancy rates and demographics, which will help you decide on the right location and then on the right type of property in demand by the demographic of the people that live there.
    I have been looking at kingswood, st marys, and Macquarie fields as well.
    If you google a guy called Nathan Birch who runs a company called BInvested, you will see that he is 27 yrs old, has approx 70 properties and many of them have been in Mt Druit. There would be many archived articles on him on the net, and there have been many articles on him in All the investment magazines.Maybe have a look at his strategy and see if it suits you.
    Anyway you are young and have a long time for any little mistakes you make to iron themselves out. sometimes it's good to just jump in after you have done extensive due diligence as getting started is the hardest step.Doing heaps of research should help you advoid buying a complete lemonAfter that you keep accruing knowledge and experience and it all starts falling into place.
    Good luck
  • Eos Property | 27 Mar 2013, 12:25 PM Agree 0
    Hi Michelle,

    I must admit I am intrigued by your post - promising the world in terms of services and delivery yet the company is not identified AND you use a hotmail address. Seems strange to me.
  • Jenny | 27 Mar 2013, 12:59 PM Agree 0
    I agree - "Michelle" if that's even your real name, don't spam this site. It is a really helpful forum and a great to place to learn from other investors. It's a shame people like you feel the need to do this.
  • Ross | 28 Mar 2013, 12:48 PM Agree 0
    hey i would also like to agree with everyone in regards to michelles comments, total garbage and if that was a promotion for a company then i would steer clear of such a product, as the self marketing strategy does not even seem to work. congrats mate on taking the plunge at 21 your will be very succesful, very early in life. In regards to The Nathan Birch comment from Pauline, just wondering if you or anyone else has used B invested services or mentoring program. as i am a 25 year old mine site worker. looking at developing a substantial property portfolio before 30.
  • YIP Editor | 28 Mar 2013, 03:38 PM Agree 0
    PLEASE NOTE: Comments regarding "second post" and 'Michelle'. The post these comments relate to was removed by this sites administrator for breaching the usage guidelines.
  • Jane | 02 Apr 2013, 07:29 AM Agree 0
    Good on you for starting early.I purchased property whilst still a student receiving a student allowance. Some things I would suggest are: always buy at a discount - or if you can't, generate more equity through developments or renovations. Get double or triple incomes, i.e. two separate houses on the same block. Use 100% bank finance (most people already know this anyway), use low interest credit cards at 1.99% if you do need to bridge finance for a bit. Ensure rental income covers everything including property management costs. Look after your tenants - keep houses fixed up in good condition. The house attracts the tenant (as does the area). Look for places where infrastructure, growth and development or "gentrification" will occur. Look for ripple suburbs with good services, shops, employment and transport links. Always consider your exit strategies just in case - could the properties be sold or sold as a rent-to-buy if you had to sell? i.e. - make sure the numbers stack up for this and yes - also at higher interest rates. Consider pet rentals - they are hard for tenants to find and in high demand, attracting a higher price. Many tenants will secretly keep pets anyway so just charge them more up front to have them. They are often better, more responsible long-term tenants too. In the houses get rid of sliding doors - anything that can fall off its tracks/ rollers - you don't want phone calls to fix those. also put door stops behind every door. Pay for the garden/ lawn to be done even if your tenant says they'll do it (they wont). If the house looks good, you'll get better tenants. Paint the front fences for the same reason. Tenants need storage! Get places with lots or put lots storage in. Lock off areas you don't want tenants in - i.e. under the house and explain why if needed (safety). Check your insurance covers "uninvited guests" - i.e. burglars - they can sue you if they injure themselves robbing your place (a rental of mine was burgled while under construction). Plant low maintenance or low-water plants if any, otherwise lawn. Keep enough space free for kids' trampolines. Look for shoes or bags tied to power lines - it's a tinny house/ street so avoid buying in those areas. Buy for capital growth and yield - it's possible to do both and it lowers your risk. Many people forget investing is mainly about managing risk and protecting your capital. Therefore think of all exit strategies - if things went dire and you had to sell...?? I was made redundant and my house was destroyed in a flood/ earthquake but fortunately I was able to sell (eventually). Always keep LVR below 80% at the most, less is better. If the banks make a margin call for lenders above 80% yours will be on the block - even if it's at 81% LVR. Split your loans into smaller tranches and fix now while rates are low - put a tranch on principal and interest (many investors disagree with this), for example just $40k - again it lowers your risk as you'll have a bit of equity to reinvest. The rental should cover this anyway. Put automatic fan-timers in bathrooms - many tenants wont turn fans on and ceilings will get wrecked. Don't use recessed downlights - you'll get phonecalls from tenants who can't change the bulbs and they're a fire hazard if someone forces them by pushing bulbs in and damaging them trying to change them. Put at least two 10-yr battery smoke alarms in every rental. Tell tenants to keep a hose attached to an outside tap in case of fire. Avoid upstairs/ downstairs flats - you'll have problems with noise and getting a good match between tenants. Better to get side-by-side houses or units. Good luck!
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