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New Investor - HELP

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James | 15 May 2013, 11:29 AM Agree 0
Hi Everyone, I am a 25 year old living in Canberra and purchased my first property with my partner two years ago in which we have recently moved into after renting it out for a couple of years until we were in a good place financially. We were quite fortunate with the price we got for the particular property and having the time to save a large deposit leaving us with over 300,000 in Equity. I realised that this money was simply sitting their collecting dust and have been looking into the world of property investing. There is so much to take in there seems to be negativity behind every door when seeking advice from people.

Currently the home we live in is an inner city suburb going through gentrification and we purposely bough an older home so that we could do renovations and build more equity. We hope to eventually rent this place out. Trying not to over capitalise is proving difficult.
My question i guess is where do I start. I want to buy my first investment property in Canberra before i venture out as I don't feel comfortable buying abroad as I believe i will have more success buying somewhere that is familiar to me. Is Canberra though the right place to buy and where in canberra? There is a lot of talk about once the coalition gets in which looks inevitable that house prices will plummet as history tells us and it will be a great time to buy. Canberra has had a number of residential developments as well over the last decade and I believe there has to be a surplus of housing at present.

I'm feeling a bit out of my depths here and would love some solid advice or even a mentor. Someone to show me the ropes because as you can imagine entering into the property market is a somewhat daunting task.
  • Eos Property | 28 May 2013, 08:46 PM Agree 0
    Hi James,

    If you are going to rent the property out at some stage in the future you may wish to consider changing your loan to interest only and link an offset account to your home loan. A structure like this maximises your flexibility and tax deductions moving forward. This more important if the next place you buy becomes your new home.

    Whichever way you go (renovate or buy something some else) make sure you work with a good broker. Someone who knows their financial structuring. At the same time you can also get the broker to work out your borrowing capacity so you can see what is affordable. If you are looking for a broker try Jamie Moore at Pass N Go Home Loans - Jamie is Canberra based.

    If you believe Canberra is (or will be) over supplied then you may need to get out of your comfort zone a look elsewhere. I know that sounds daunting but if you are right in your assessment of the supply level then investing in Canberra may be a handbrake on your plans - that is, unless you can value add.
  • MAHM Investment Group | 07 Jun 2013, 12:03 AM Agree 0
    Hi James,

    EOS Property has some great advice. You really want to work hard to find the right people to use in your investing team. Such as your Brokers, Bookkeepers, Accountants, Lawyers, etc. You want people in your team that have already achieved what you are trying to do, so they know exactly how to do it and aren't just giving you advise from a text book.

    As far as where is good to buy at the moment... In my opinion there is no such thing as specific 'Hot Spots'. That is a term that gets used a lot, especially by the media to spark interest for certain areas. However, once you have the education, which will come through making mistakes, stepping out of your comfort zone, and getting yourself the relevant education from the people that have succeeded in doing what you are trying to achieve.

    I personally advise everyone to always be in a state of learning and to seek out advise from professionals and to continue growing. I can recommend some places and people that work out of integrity and would be able to help you on your way with the education you seem to be looking for with regards to improving your investment situation and to flourish moving into the future.
  • Forrester Cohen | 12 Jun 2013, 02:32 PM Agree 0
    Hi James

    Have a look at the new App in iTunes stores for the Property Investment Puzzle Quiz. It helps you compare your approach to that of the professionals. Useful to be sure you are considering all options.
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