How to buy your first Sydney property.

29 Oct 2015

By David Shaw. 29/10/2015

Buying your First Property in Sydney – How could you now do this?
Recently I did a series for our staff on how they could use tax benefits on a regional property as a forced saving tool to build up a deposit on a Sydney investment property.  It seems so hard to find the deposit for a Sydney property which could be up to $200,000.
Some ideas to consider:
  1. Buy a property in a regional area for say $150,000. The deposit required will be no more than $30,000 so this will be a much easier task than say $200K.  This will produce a cash positive result from day one as the below example shows:

  1. Set yourself a goal.  In this instance you could set yourself the goal of paying off $300 per week and then pay this property off over 10 years.  If the property then goes up in value then to say $200K you then have your $200K deposit for a Sydney property.
  1. Don't let repayments kill you.  This is a lot less stressful way of saving for your Sydney property than taking out a huge loan with massive repayment of $5,217 per month on a $1 million loan as opposed to a $783 per month on a $150,000 loan.
  1. Take on a larger mortgage in your 30's.  It is an appropriate time to take on a mortgage when you are near your peak earning capacity.  This then enables you to take on a loan and not be over extended.
Even if you buy an older property in a regional area without a lot of depreciation, from a cash point of view you will in many cases cover your costs.
Regional Properties
My main tips of buying in regional properties are:
  1. Don't buy in mining towns
  2. Buy in regional areas with market depth, ie. regional centres with over 30,000 population .
  3. Make sure you become acquainted with the area.  Don't just jump into an area.
  4. Research the future growth prospects of that area.

David Shaw is the CEO of WSC Group: Certified Practising Accountants and Business Advisors, and
was voted Property Tax Specialist of the Year in the Your Investment Property 2013 Readers Choice Awards (as well as runner up in 2012, 2014 & 2015 ).


*The advice published on social media mediums by WSC Group is of a general nature and does not constitute specific financial advice.  For a detailed financial strategy you should consult with a qualified financial advisor before making any investment decision.
Disclaimer: while due care is taken, the viewpoints expressed by contributors/sponsors do not necessarily reflect the opinions of Your Investment Property.


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