House Or Car

[Cubes]

Any land available?

Buy and sell when the time is right and you can make some very good money without being too out of pocket due to a much smaller loan.

[Wink]

Problem with land is that I don't get any money back from rental which is what I definitely want with an investment property

Also, can you buy a property and then sacrifice some equity in it to buy a car?

[R34GTTSKY]

Wink my advice would be i did this 2 years ago

bought a second hand house n then started rented it out to people of coruse depending on location n how much u get a week for it it might work out for u

atm ma rentees are basically helpin me to pay the bank back a month so which means i still can save money in buyin the car i always wanted ma 34 if u buy land u basically payin "white rent" so to speak like u have to fish out every month out of ur savins to pay it back

[Cubes]

You'd need to do the calcs on interest etc to see which would work out better.

The oldies bought a block of land for 150,000 a couple of years ago, they are now getting offers for 270,000.

They sold up all their rental properties just as the boom was ending as the old man made mention that it wasn't worth keeping due to the market going stagnant (as it does after the boom) which is bad when your paying interest on near the full loan amount. :S

[Wink]

Is it worth it to get an investment property that is something like a 1 bedroom studio apartment which is about an hours commute to the CBD?

Cos that's all I can afford right now!

[R34GTTSKY]

how much are rough house prices over in the east atm?

find out info from ur real estate like is it easy to rent out? how much u'll roughly need to pay back a month? close to shop[s transport etc etc? and the age group that it would be suitable to rent to

usually one bedroom apartments tend to be occupied by either a nearly married couple that works alot or a single block travellin needin a place to stay

if ur not in a hurry look around n u m ight find the right place i thought about buyin land but instead went for investment property worked out for me n e way

[AzzurrA]

DEFINATELY a house..

volkswagen? dude.. i signed up just to tell you to stay straight and keep that skyline, anybody who spends that sort of money on a VOLKSWAGEN no offence, deserves to get laughed at! your friend is talking sense, tell him that your thinking of buying a 34gtr instead - and then maybe he'll understand where your coming from.

but volkswagen? dude .. shit!?

lol... you have no clue

[Nismo_Boy]

Buy a block of land that you can sub-divide. Might have to check with the council. Can make a shitload back when you sell bot blocks.

You my friend clearly are a developer.

Depending where you are and so forth and if you can subdivide the block, it is normally around $50k a block (roughly) in fee’s.

In Noosa Shire I know it isn’t far off the mark. Unless you have owned the land for a while already, or plan on doing something with it there really isn’t that much money in just cutting it up (short term).

AzzurrA

Buy a house. End story.

fun33

As said before, you have no idea

[kralster]

You know what pisses me off.

Our house in Victor the land was bought for 20 grand about 15 years ago.

Now the block behind us the guy wants between 150 - 200 thousand.

How the hell are people supposed to pay that!

People that grew up in our town can not afford to live there anymore cos of all the adelaide people pushing the prices up to stupid levels.

I'd love to buy some land in my home town but there's no way I can afford to.

[MANWHORE]

The thing is this. Once you decide to go for the house, THAT's IT. You're locked in for 20 years or however long it takes you to repay the house.

In that period, you'll be poor.

One of my friends took this road, whereas I decided to put the house off for a few more years.

It's not like you're never going to be putting off the house. I just reckon, put it off for a FEW MORE YEARS. Tha'ts all.

At the moment, you're free.

If you want to splurge some money on something, it's cool. But if you have a house to repay, you'll be like oh no, I can't go on that holiday, because I need to repay the loan off.

23 is really young. I'm only going to finish uni at 23. That's as if you finish uni and buy a house straight away.

From a financial point of view - like if you want to make more money quicker, yes, buying your house now is better. But,y ou'll be locked into a boring life. Once your house is repayed and you have liquid cash, you'll be quite a bit older.

Why deprive yourself of fun now, when you're young. Do you want to wait until you're old, like those old people driving around porsches?

[NISMO]

The thing is this. Once you decide to go for the house, THAT's IT. You're locked in for 20 years or however long it takes you to repay the house.

In that period, you'll be poor.

One of my friends took this road, whereas I decided to put the house off for a few more years.

It's not like you're never going to be putting off the house. I just reckon, put it off for a FEW MORE YEARS. Tha'ts all.

At the moment, you're free.

If you want to splurge some money on something, it's cool. But if you have a house to repay, you'll be like oh no, I can't go on that holiday, because I need to repay the loan off.

23 is really young. I'm only going to finish uni at 23. That's as if you finish uni and buy a house straight away.

From a financial point of view - like if you want to make more money quicker, yes, buying your house now is better. But,y ou'll be locked into a boring life. Once your house is repayed and you have liquid cash, you'll be quite a bit older.

Why deprive yourself of fun now, when you're young. Do you want to wait until you're old, like those old people driving around porsches?

Good point.

I went down the house road 4 years ago, sold the skyline and put everything into it. Lived this way for a few years and thought wasn't worth it, so sold up, took the profits, am now building a smaller house, looking for my GTR :-), and planning a nice long holiday. With the benefit of hindsight, doing it tough for a few years was worth it my case.

Personally I think property can work short term in the right area at the right time. A friend did the same a year after me, and beacuse the bottom has fallen out here in sydney, his house is now valued at over 100k less than what he paid for it.

If your looking for security, a way to go may be defence housing. You buy the place and the defence department rents it back, guranteeing rent for set period you agree on. They even have 10yr agreements where regardless if it's being used, you get your rent every single week for 10 yrs. They also do all the maintenance as well. check prices in the area though cause i'm guessing they probably inflate them a little.

[ProphetR33]

Buying land in the current market is dead money. You won't get the return on the investment that you would have 10 years ago let alone 2 or 3.

The market has crashed, house prices are on the decline as are land values. It's been a good ride for investors since the recession of the early 90's, now thats over. The market isn't tipped reach an substantial growth in up to the next 10 years and possibly more.

I have a few friends who work in financial planning and real estate, and basically every single one of them has said don't buy now. They reckon that the market will bottom out in around 2 or 3 years, and thats the time to buy, then it will experience very slow growth for the next few years.

So if you're looking at an investment property to rent out, by all means do it, but if you plan on selling it for a profit 5 years down the track then don't expect much money back if any. Land is a big no, unless you buy in some of the few remaining areas experiencing growth of note (5-6% or more) but even then, interest rates are higher than that growth.

I'm 23, but personally from what I've heard, there is no chance that I'll be looking at buying anything until I'm at least 26-27. You'll get a better return on investment putting your cash in a high interest long term account than buying property in its current market state. Invest in managed funds or low risk shares and bonds, boost your money now until the market bottoms out, then buy something.

[Cubes]

wow.. houses going backwards in sydney.

Here in adelaide unless you buy up in a bad area houses are still going up. But only a little.

If your looking for security, a way to go may be defence housing. You buy the place and the defence department rents it back, guranteeing rent for set period you agree on. They even have 10yr agreements where regardless if it's being used, you get your rent every single week for 10 yrs. They also do all the maintenance as well. check prices in the area though cause i'm guessing they probably inflate them a little.

Thats an interesting little tid bit.

[Cubes]

I have a few friends who work in financial planning and real estate, and basically every single one of them has said don't buy now. They reckon that the market will bottom out in around 2 or 3 years, and thats the time to buy, then it will experience very slow growth for the next few years.

So if you're looking at an investment property to rent out, by all means do it, but if you plan on selling it for a profit 5 years down the track then don't expect much money back if any. Land is a big no, unless you buy in some of the few remaining areas experiencing growth of note (5-6% or more) but even then, interest rates are higher than that growth.

This is one of the reasons my oldies sold their rental properties.

They worked out that the interest paid, income received and value growth simply wasn't worth it and money was better off pushed in else where.

[Beer Baron]

wink, i wouldn't buy a small appartment 1 hour out of the CBD. if buying appartments I would not buy futher than 15 -20 min from CBD, and preferably even closer. that way you are much more assured of rental income, and steady capital gains.

well 2 and a half years ago I bought a place in sydney. I still have all my cars and yes I lived there for a while, but now rent it out. I get $400 a week rent for it. azzura, I think you need to do some serious sums. if you have $15K from your skyline, and were borrowing money even for a $50K car, you can't afford property in sydney. it will bury you. for starters you will need minimum 10% deposit, but I would suggest 20% is much better (for one thing it saves you a few thou on mortgage insurance). so given that an average place in sydney starts at around $400K that means min $40K deposit but much better with $80K. if you have $15K now that leaves you short by $65K (and no you can't borrow money for your deposit).

now if you do have more than $15K then why in gods name were you going to get a personal loan to buy this $50K car? very bad idea to borrow money for no reason.

my advice is unless you have a decent income forget about buying a house for a while.

there is one solution to this problem though which will let you buy a house and keep the car.... earn more money!

oh, and finally about the negative gearing benefits. yes, you are making a loss on the property of which you will get back between 30 and 49% through your ITR, BUT if you are also making good capital gains at this point then it works quite well. of course a cash flow positive property is generally better, but there is nothing wrong with a little bit of negative gearing, especially if you have a decent taxable income to claim from.

[predator]

That's one of the things.. people look at the last 5 years, see people that got rich quickly and think and think the property market is always 'guaranteed winner' for quick money. It's not always, and goes in cycles.

And like somebody said, you've still got to have quality of life, even if you do decide to buy. If you buy a place, can't afford furniture, can't afford nice furniture, can't afford a reasonable car (if that's your thing), can't afford holidays, etc - then you really have to ask whether it's all worth it.

You definitely don't want to go in a spiraling debt cycle (e.g. having to borrow for other things because you don't have enough spare cash) into the hope that "one day" you'll be rich out of the whole thing. You might not even have that much time in life left.. my mum died recently at age 62, several years before the "retirement" age.

[blk180]

I brought a house with my parents so i still have money to waste. At the same time im growing equity so much so that i may buy a second house this year, im 24 and have a R32 GTR. In sydney the avg house price is 550k crazy.i live out west so didnt pay this much for my propertyl.

[AzzurrA]

ok, i've done a bit of research into this (well, the property side of it anyway) since posting this thread - i have found some areas/type of property that look okay....

For example, 1 bedroom studios/units on the gold coast (In Surfers Paradise itself, or very close-by, generally right near the water as well) go for somewhere between $100k and $200k, most of them are fully furnished, and the tenancy rates would be fairly high (most of them are in hotels/resorts etc) - did a search of what these are worth, to rent, and it seems that, assuming i had a tenant in there constantly, i would only be out of pocket between $50 and $100/week... do units/apartments hold or appreciate their value over time, such as we've seen houses and land do over the last few years? (That's ignoring the fact that what a few people have said that the housing market is dead at the moment)

[Nismo_Boy]

Units in hotel/resorts tend to have a higher body corp. then units not in a hotel/resort complex.

If you’re looking for an investment unit, with a decent return I have one listed in Chermside now. $265,000 within walking to shopping centre ect.

Body corp’s are $1040, rates are $1300 and there is $18,000 in the sinking fund.

2 bed, 1 bath, just been reno’d and has a single lock up. A 12month rental guarantee can be negotiated if need be.

It will rent for $265 a week.

[psybic]

Love this question.

I've spent the last 5 or 6 months working on a site with some calculators you boys would love.

Fact of the matter is, there are lots of facts of the matter, there is alot of hard and fast rules people like to tell you, which they made up out of some rough calculations in their head.

Taxbreak was the site I built. Yeah sure, we built it to gain users so we could send them a newsletter which has FCSL written on the top, so if they were after an investment with high saftey and medium return, they'd invest with us. Besides that, its free no catch.

At the moment its down for legal reasons.

Point I'm making is... I HAVE done the sums. Many times. Many sums.

Did you know that any loan you have for purpose of investment, has tax deductable interest? You car loan does not.

Did you know, that investing $50,000 for 15 years at 15% per annum ( very achievable with a managed share fund ), will yield, $406,853.08 at maturity... 30 years... $3,310,588.60. Wait... yes thats 3.3 million... sure there are taxes and stuff you'll incur each year. You get the point though. You can retire on that shit.

I have some awesome calcs to work this shit out.

Investment Calc Play with that. Its just for me, so its got a few bugs if you enter stupid shit, but its not released on any sites yet, so its ok for me just to use for these situations.

I've built some pretty comprehensive calcs over the last few months. Negative gearing and such. Which yes, consider, land rates, insurance, stamp duty, bank fees, blah blah... wage, tax benefits, etc.

I'm sick of advice being half arsed. Its not rocket science, but you do need to consider the as many variables as possible.

Not just... yeah rent money is dead money. f**king useless statement if I ever heard one. So is interest... unless that interest is a tax deduction, for example.

I'm not a financial advisor, or interested in being one. I'm a computer programmer who has been contracted to write heaps of calculators for a site which now possibly won't be released. So I don't know financial jargon, I know numbers. Its a numbers game.

Don't worry about what all the old timers down the pub are saying. Do the sums. If someone tells you get a V8 cause its got "heaps of balls", you'd laugh. The statement is unquantifiable and not measurable in any way.

My long and drawn out point is... its a numbers game. You need to work out the numbers for some case scenarios. Not listen to opinions which are forgetting or simply don't know about many variables.

eg. Buying and Selling.... Ever heard of Stamp Duty? Its a killer.

Stamp Duty Calc Run that puppy on some prices. Yeah, in NSW almost $7,000 stamp duty on a $240,000 place. That eats in profit pretty quick.

We even have stamp duty on mortgages in this country!!!

Mortgage Stamp Duty Look! almost $1000 just on the mortgage stamp duty on a $240,000 loan.

PM me with more questions. I could go on all day.. just with numbers... not even opinion based stuff.