Hey all
I have precious little savings of about $60K. And I have the audacity to try to buy a property in Sydney. I asked CBA and they said I can best hope for a loan of $550K. Needless to say I can probably get a unit in that budget but given the current scenario of likely price fall and more importantly interest rates increase is it too dangerous for a person with a family, single income?
Ps: I am looking to buy in West to be closer to work.
Western Sydney..westmead etc.
a person with a family, single income?
becoming a rentvestor could work for you.
You mean rent the property I purchase and continue to rent myself?
I do this, its great. I can buy anywhere and rent where I currently can't afford to buy.
It costs money to rent and it costs money to own. The balance always depends on only two things: money and intangibles.
If you look at money you want to maximise your return and/or minimise costs. If you consider capital gain potential, interest rates and rent prices you'll be able to make a financial decision.
At the moment you believe there is little capital gain potential, so the comparison becomes easier.
Intangibles include your own ability to save if you don't have a mortgage, peace of mind from owning / not having to move, the ability to make changes to your home etc.
Some people are only happy owning and are willing to put up with financial deprivation because it brings them so much peace of mind. Others love the flexibility of renting and the convenience of having a property manager that is available to fix any problems.
TLDR; how much do you want it?
How much do you earn?
The average ozbargainer claims to make around 150k+ a year. OP, are you an average ozbargainer?
Haha, I'm definitely far from being an average Ozbargainer then… Lol
Below average :)
so you're willing to pay LMI for not having 20% deposit ?
Yes…alternative?
Likely price fall? People been saying this for 15 years now?
A price fall only matters if you're an investor looking for capital gain or equity to buy another or developer. For example, if you buy a place, and the price falls by 10% but you plan to live there for 10-15 years, what does it really matter? You don't loose anything until you sell. After 15 years of repayments you will probably never need to sell it anyway.
The only thing that would affect you are interest rates rises.
Once again this is also flawed, everyone keeps saying, wait till the interest rate rise and see what happens. The basic tenents of monetary policy are low economic growth = low interest rates / high economic growth = high interest rates. If our economy is down turning, why would interest rates rise? Macro ecomonics like interest rates look at the economy as a whole, and currently we have had a few quarters of negative growth which means we aren't doing that well, so why would the reserve jack up interest rates? The reserve isn't just going to jack up rates cause property prices are increasing? Its a macro policy, not a micro policy.
Lastlty, everyone is an expert nowadays. But no experts predicted this boom in the first place. So do what you are comfortable with and what will assist your future endeavours, if you feel it is right and are comfortable, just do it.
Single income. Does that mean potential for double income? I would consider the what ifs? What if repayments go up, do I have a backup plan? What if u need to upgrade to larger place if your family grows? If you have considered, then real estate is good motivator to save money.
perth?