I earn $55,000 a year have $200,000 cash from an investment.
How do i build wealth? i am 39 y/o.
SHould i buy a property and fulfil the Australian dream ?
I Have $200,000 Cash - Should I Buy a Property?
Sam Sharik on 04/12/2019 - 16:47
Comments
yes i found a better way to make use of the internet than watching porn.
Master in nice arts and humanology ?
Surely your hourly rate at your current work is higher than whatever rate you can get with uber.
If you're 4 day week earning 55k means your hourly rate 33/hr
If you're 3 day week earning 55k means your hourly rate is 44/hr
Pretty sure uber is not going to be better than this…
Just work full time if you want to earn more money.
Can't teach an old dog new tricks.
Depends on where you live, if in sydney, propably not, unless you want a 1-2 bedroom unit.
i live in QLD.
I would compare your current rent vs mortgage firstly, and since we are at historical low interest rates also makes sure you can service the mortgage even if interest rates were to double or triple
Qld looks like a soft marketplace atm, propably talk to some real estate agents and check stock in the location you want. If you find something you want to live in or become an investment property in the future, go for it.
thanks Garetz. What do you think about buying dual occupancy properties? I would only have to chip in a small percentage of the repayments.
@Sam Sharik: If you can find something worth buying, dual occupancy can be a very good cash cow, it provides an income stream and a place you can live, so if you find one you want go for it.
@garetz: i think thats the way to go.
Pay off the mortgage in 15-20 Y/o and then buy an investment property.
@Sam Sharik: Do you know in Qld the govt charges you two council rates if you have dual occupancy properties ? Qld rates are so much more than NSW. Also they are proposing to the regulations to make it much harder to kick out tenants.
in Qld the govt charges you two council rates if you have dual occupancy properties
That would depend on the local council, not the state government. It's possible that all councils in QLD do it, but not a given. Unless the state has regulated as such.
Source?
@Chandler: Councils have power to charge rate under the Qld Local Govt Act. However, Council rates you based on the valuation issued by the Qld DNRM (dept of Natural Resources Mgt). If DNRM issued separate valuation for 'multiple' dwellings on the same lot, then Council will rate twice. Unfortunately too difficult to provide links as the only way you can confirm is to ring the Council rate department.
@Queen Muffin: Thanks for the clarification. For some reason I didn't make the connection between "dual occupancy" and two houses on the same lot.
Edit to add: isn't the valuation based on the land, not the building/s?
Edit II:
From https://www.qld.gov.au/environment/land/title/valuation/about/non-rural:What improvements are excluded from the site value?
The following works do not constitute site improvements:- structural improvements on the land such as houses, buildings, sheds, fencing, dams and landscaping
Edit 3:
My take from the above would be multiple dwellings shouldn't be rated twice, as there would only be one valuation for the plot of land. Wouldn't stop council from rating them both but (presuming it's not prevented in regulation/law)@Chandler: Rates payments are apportioned when there is Strata titling. So they are charged separately, but calculated on land value. Services that multiply due to srtatas are charged in full (bins etc). QUU will also charge per sewer connection etc.
Atleast, this is my understanding.
@Sam Sharik: Even if it's a house with a granny flat, the granny flat income can negate half your mortgage repayments.
If you buy property make sure it's not in possible danger areas like fire, storm or flooding.
Buy some alt coins
don't believe in investing in any form cryptocurrency
Better off playing roulette.
Price difference currency. ( like roulette but no need to go to the casino )
How do i build wealth?
Speak to a professional.
The "Professional" will take his money for sure.
you are smart
A casino professional might give back double!
Real talk though respect to you if you managed to grind to 200k on 55 a year and not waste it.
thanks.
See a financial advisor - see a few til you find one you can trust. They would be able to help you the most. I say no to a property unless it's one you will move into and live in (and not pay rent). You might be better off putting it into a managed investment or super or shares - but see a professional!
Thanks.
You should see how "professional" I look while researching on google and youtube.
lol
It's sad how financial advisors have such bad rep from a few advisors that did the wrong thing. I can happily say I've found a great financial advisor that has helped me save and improve my cash flow. I didn't have debt or negative cash flow before, but there are so many things that his team has set up to help me become more confident with my finances. He's also set up a leveraged managed investment to help me build wealth. He's not connected to any bank so home loan suggestions and income protection insurance is based purely on what is best for each of his client's individual circumstances.
RE market is going through the last phase of the crash (dead cat bounce). Don't get in now but its your money, you are free to do what you think is logical. I would invest in some Crypto since its all time low for this year.
And still overpriced
Thanks. I dont believe in any form of cyrpto
Fiat currency had its run and it will be clear post GFC in late 2020 early 2021 that its going to die.
I'm glad someone said it
Get some metal
All markets are insanely high with no reason to stand on. "Adjustment" in the next 2 years, with a drop of 30%-50% ( like 2008 ). THEN and only THEN buy.
Don't buy into funds, buy Indices ( depending on the currency AUD vs USD, maybe US indexes, as the ASX has not grown as well as other indices )time dat market
We got a fortune teller over here
Cryptocurrency gambling is about the only way to (potentially) get massive gains on money; housing brings in about 10% per year as a comparison point, and money in the bank almost nothing.
how do you know? If the US - China trade war gets out of control we could be in for a surprise. Long term there is a reason for bricks and mortar to be called real.
Move to Pattaya
and do what ? Drugs?
no, women.
Lady-Boys ?
What if you ARE a woman!
Australian dream of buying a house is trending towards 300sqm because of greed. Rather not get involved
Agree.
People are so greedy for living close to work when land is finite so small subdivisions sell as demand outweighs the luxury of space.
Soooo greedy.
Most European houses are on less than 300sqm parcels.
The developers overcharge for 300sqm. Who wants to live that close to people? Not me rather ride a horse into town and have more space at home.
I don't think lots should be able to be any smaller than 500-600 and should be a government policy. The only people that really benefit from the small allocations are the developers.
Bring in the third world and get third world problems
its pretty (profanity) ayy. in the area i wanna buy in theres sub divided house thats 300sqm for the same price of a 780sqm and the 780sqm one is 3km away from the cbd. i'd rather over 2x the land for the same money. then i can sub divide when the greed comes my way :)
Personally I would, you seem to have enough money, I'm assuming you're renting now, in which case I feel it would be worth, I'd go at least a 2 bedroom maybe 3. I feel they're easier to sell later, I'd probably use it as an interim house, maybe later when pricing goes up you can sell it at equal or higher price and get a better place before you later settle down.
I'd be worried about payback though, you have heaps of capital? but the monthly payments may be a little tight, at 55k a year. Also depends on your future aspects (family, children, want for a better degree or job you'd like more?)
Yes renting atm and not enjoying.
This is a pretty important bitn of info. I'd but a property then if I were you.
The grass is not always greener…
true
Buy a racehorse
But the vegans will kill off all the animals.
yeah but some will be created using software. Darwin books need an upgrade.
Lol… this guy knows where the future is heading.
Are you an entrepreneur? Start a business with you r capital
If not, are you knowledgeable about company balance sheets? Then invest in a selection of hand picked stocks of your choosing.
If not, so you still have some risk appetite and don't need the money for the next 10 years? Then buy VAS + VGS or otherwise low cost diversified index funds
If not, do you consider rent money as dead money but love to pay interest? Then get a mortgage and buy a house in your budget.
If not, do you want a fixed interest return better than the banks but still want a bit of risk? Try p2p lending like rate setter
If not, are you scared of losing any of your money? Then ubank and get 2.1% interest.
If by now, you have no idea what I have been talking about, then go book an appointment with a financial planner or just send me your money because you obviously don't know what to do with it.
Good points AbsX - I do run a small business and have share investments.
This is the sensible answer.
Why u being so rational on Ozbargain?
I apologise my good sir
Curious, why VAS + VGS as opposed to diversified fund like VDHG?
I was only giving examples, it's not meant to be an exhaustive list
Invest all of it in eneloops, in case there is a world shortage.
I would buy a house. There is a risk of losing money with any investment but at least with a house you can use it as a place to live in as you get old. You can also rent out rooms to raise extra cash.
true. thanks
What was your investment? Invest it again?
You belie your avatar.
Invest it into my account
I would recommend you to buy shares rather than buying a property. Reasons:
1. Your income level won't give you much benefits of negative gearing/tax reduction
2. Shares are much easier to buy/sell. If you lose your job, you won't get stuck with a big mortgage
3. Shares has dropped these couple of days and probably will drop even more in the coming days due to the trade talk. Good time to buy shares. Pick some which give you good franking dividends and shares with good growth. However do your research before you buy.e.g shares in health care, technology. Personally would not recommend bank shares.I agree - Shares are better than buying a property but there is more risk involved.
True, hence you need to pick companies that have good profits and good board directors. Risk might not be a bad thing. Some people make big bucks by taking risk. You need to make assessment yourself and see how much risk you can and are willing to take. Also forget to mention there is a type of share called penny shares which cost less than a cent per share. Yes they are small companies with no dividends. Their share price is more volatile and can rise or drop by 50% in a short period of time. I made profit before buying penny shares and started off buying small volume to test the water. Given it is something like $0.010 per share, you don't feel so bad.
good advice. do you own real estate ?
@Sam Sharik: Yes, I have properties and shares. Shares you can leave it to grow. Properties you have to pay more attention even you have property agents to manage for you. You might need to come up with extra money to pay for repairs. When tenants move out and you lose income and have to wait for new tenants to come in.
@Sam Sharik: Also, I'm not saying buying property is not good. Given the income level you quoted in the headline, it might be too risky. If one can afford a mortgage, I would say buy a small place, pay it off as soon as you can,then you can borrow more money with your home as a secure asset and then buy investment property. I have friends who do it the other way round, which is buy an investment first so they can get negative gearing and more tax reduction. When they accumulate more money from having an investment property then buy their own home.
Buying shares outright has no leverage.
Buying shares with loans and on call repayments is risky. Buy a nice house you want to live in
1 you get to enjoy it
2. It may have appreciation
3 any capital appreciation has 0% tax for primary place of residenceThanks Diceman99. Wasn't aware of Point 3.
Buying shares is not a good thing unless you understand them and do a lot of reading on what you are investing in.
I would not recommend buying shares for novice investors.
DYOR
Good point. I agree with you.
Leverage yourself up to the hilt. But make sure you can afford repayments if interest rates go up to 8% in next 10 years
good advice.
Buy ANZ/WBC stock. Nearing 5 year low, bound to pick up.
thanks but i dont agree investing in bank shares is a good idea.
any reason why? sure with everything going on it's not looking good, but when you compare it against other stocks the banks are likely the safest. Including franking credits, you're looking at a 10% yield.
Bank shares used to be the safest but not after the Royal commission. Banks are struggling for sure.
https://www.marketingmag.com.au/news-c/news-semrush-banking-…
You have 2 masters and the first place you can think of for financial knowledge is OzB?
/s You will be wealthy in no time at all.