Starting Out In Property Investing

by Josh H
(Sydney)

Hi,


I am a 19 year old about to start University this year and want to get an early start in Property Investing. I was hoping to get some advice on my options since I don't have a full time job and probably won't until I finish Uni. I realise my options are fairly limited until I finish my studies but I was wondering what your professional advice would be. I currently have 20k saved up but I don't know if that would actually be of any use to me. Any help/advice you are willing to give would be greatly appreciated on whether to try and start out in some small-scale investing or to wait it out.

Many, many thanks

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Feb 26, 2012
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Brilliant early start!
by: ELizabeth Elwell-Cook

Hi Josh,

You're doing amazingly well, knowing that it's a smart idea to get on the property ladder early. I only wish I had been as determined when I was 19!

20K is not a bad start at all. You should be able to find flats in outer areas of Sydney, or other capital cities which are under the $200,000 mark (leaving you with a 90% LVR), or maybe look to regional areas with good growth prospects, for something nearer $100K, which will give you 80% LVR and no Lenders Mortgage Insurance to deal with.

Make sure what you buy is postively geared (puts money in your pocket after paying all your expenses on the property, even if it's only a few dollars!).

Not having a job is a bit of a hurdle to get over. I know you're studying, but it may be a good idea to get some work so that you can show a lender you're able to cover the repayments if you go without a tenant. I used to earn good money from Tupperware while I was studying, and I could fit my party plan events in around classes and study times, with a very good return (often $500 per week for two parties, with very little time if you're smart about it). There are plenty of other options for this type of marketing job out there too!

Also, don't forget Landlords Insurance. Any landlord should have it, but you especially, if your income is going to be lower for a while.

Explore the options of going in with a very trustworthy friend or family member to buy your property. Make sure you have a good contract, with options if one party wants to leave the deal written down clearly though.

None of this advice takes into account all of your personal circumstances, so I cannot stress enough that you should seek financial and legal advice before going ahead. I am neither a lawyer, nor a financial adviser!

BUT: don't give up! Where there is a will, there's a way, I've learned. If nothing else, buy a subscription to property investing magazines (there are several for the Australian market), and get on their online forums for support and ideas too. You'll get there, and you'll be very glad you did!

All the best!
Elizabeth

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