Buy a Property in Sydney before Quitting Job?

amoo-handy on 27/06/2022 - 17:34

Gday All

So i'm thinking of Quitting my job - current salary is 140k inc - because I'm abit over it, and will probably take a month or two off before I start looking for another job, probably part time to get 400-500 bux a week & try and start my own business
Dilemma i'm having is should I buy a property now (Pre approval is at 1mil) in this current bear market where I can get a loan then quit or just leave it

I will be able to service the loan for a few months if I dont have any extra income/ job

And the main purpose of buying a property will be to reno/ develop DA plans to try and add value but not sure if its a good idea to do it now or next year (considering I probably wont have the income I have now then and borrowing capacity will be effected)

Let us know your thoughts or any info I may be missing

Cheers

Financial

Comments

  • Yuddenator123 on 27/06/2022 - 17:37
    +6

    Will be tough considering you haven't secured a second job, if you want to be a bit more risk-averse, best to avoid forking out a 25 year loan - especially with rising interest rates.

  • ausdday on 27/06/2022 - 17:40
    +1

    Yolo.

  • SF3 on 27/06/2022 - 17:40
    +3

    Let us know your thoughts or any info I may be missing
    So i'm thinking of Quitting my job - current salary is 140k inc
    probably part time to get 400-500 bux a week & try and start my own business

    Another job that pays enough.

  • SBOB on 27/06/2022 - 17:54
    +11

    and will probably take a month or two off before I start looking for another job,
    probably part time to get 400-500 bux a week & try and start my own business
    I will be able to service the loan for a few months if I dont have any extra income/ job
    (considering I probably wont have the income I have now then and borrowing capacity will be effected)

    yeah, you should definitely try and get a $1 million loan, buy a property in one of the most inflated markets in the country, quit your job before actually having a new one to actually service that loan, and only have a few months of savings to cover the loan if it doesnt go to plan :/

    Even trolls arent this financially crazy are they?

    • djones145 on 27/06/2022 - 18:10
      +9

      lol nope trolls will be trolls

      do it, quit, don't just take one loan, take two loans
      2m each

      u can do it
      haven't u seen all those news.com.au articles of people making millions creating their own business.

      buy buy buy
      u should be a billionaire by wednesday

  • SBOB on 27/06/2022 - 18:14
    +4

    You already have a mortgage you've refinances a couple of times though??
    https://www.ozbargain.com.au/comment/12202614/redir

    • FLICKIT on 27/06/2022 - 18:56
      +3

      I just hope he doesn't lose mums money!
      https://www.ozbargain.com.au/node/657693

      • LiteDough on 27/06/2022 - 19:00
        +2

        Is this how OP will service the loan while out of work?

        • SF3 on 27/06/2022 - 19:03

          The bank of mum & dad, I hear they take on high risk loans and are angel investors. /s

          • ozbjunkie on 28/06/2022 - 10:43

            @SF3: "maaah I wanna quick my job, borrow us a million buckers???"

  • WreckTangle on 27/06/2022 - 18:49
    +2

    Not a good time to buy

    What do they call it now… FOOP?

    • Drakesy on 27/06/2022 - 20:44
      +1

      not according to realestate.com and domain!

      But yeah, FOOP is well and truly in play.

  • Ocker on 27/06/2022 - 18:53
    +1

    Be wise - ask mum before asking inexperienced OZB punters

  • rektrading on 27/06/2022 - 19:07

    Buy before quitting looks better on the loan application.

  • screensaver on 27/06/2022 - 19:38

    Its better the devil you know than the devil you dont know,

  • 87percent on 27/06/2022 - 19:39
    +1

    “A few months”???… lol

    • Sleeqb7 on 28/06/2022 - 10:01

      I was able to service my (considerably smaller) mortgage for a few months after quitting my (considerably lower paying) job. Just have a bunch pre-paid in the redraw!

  • Quantumcat on 27/06/2022 - 20:04

    Don't forget to include stamp duty and conveyancing costs in your calculations, plus paying double rent + mortgage while the notice period for your lease is going. You might not actually have a few months worth of mortgage payments saved once everyone has had their pound of flesh.

  • CauseNEffect on 27/06/2022 - 20:06
    +2

    No. The market is going south. Save your cash and buy in once you have started your new job.

  • Janko on 27/06/2022 - 20:11
    +1

    Not sure I'd recommend renovating at the moment - materials have gone up massively and depending on the segment, you may find in a year your renos added nothing.

    Selling myself at the moment to rebuy in a year or so, but not entirely convinced property will crash as many are predicting.

  • tallkid123 on 27/06/2022 - 20:17

    Well, use your brain OP.

    Why would the bank want to lend you money when you have no identifiable means of paying it back when applying.

    If you retain your job and get approved for your loan, then the bank doesn't care what you do at that stage so long as you have their mortgage payments ready when they want it.

    Also, not sure if it's the right time to do renovations considering low supply of materials and therefore rising costs. Even more so since you want to go through the DA process with your council. That's gonna take awhile and cost a fair bit of money and time with the possiblity your application gets denied.

  • urahara on 27/06/2022 - 20:24
    +3

    Dont do it . Move to a more affordable city . Melbs/Brisbane etc. . Spend some $$ while watching inflation killing everything & laughing at it.

    • ozbjunkie on 28/06/2022 - 10:44

      I'm all ready with the marshmallows

      (I got in b4 marshmallows to the mun)

  • Drakesy on 27/06/2022 - 20:46
    +3

    Plz do it and make a Netflix documentary out of it.

    "How the Australian housing market crashed"

    feat. "BuT HouSEs OnlY EvEr Go Up"

    • AustriaBargain on 27/06/2022 - 20:49

      "Safe as houses".

      • payless69 on 27/06/2022 - 21:19

        Bricks n' Mortar! The banks will have a safe once they claim it back!

  • AustriaBargain on 27/06/2022 - 20:48
    +2

    Might you need to borrow money for your business instead?

  • screensaver on 27/06/2022 - 21:59
    +1

    A bird in the hand is worth 2 in the bush

  • Waltervp on 28/06/2022 - 08:05
    +1

    I see where you're coming from as you can get a mortgage relatively easy now, but everything else is against you. Don't do anything untill you have reliable money coming in again. Starting a business is difficult and getting a mortgage if you only just started a business is also difficult. Given the market is at peak I think not buying now and waiting till your own business is established for a year or two or waiting till you have anther job is probably a wise investment choice. You don't want to be stuck with a $1M mortgage and a house worth less…

  • singlemalt72 on 28/06/2022 - 08:57
    +1

    So, less than a year ago you were going to borrow money from family to reduce interest on an investment property
    https://www.ozbargain.com.au/node/657693

    Then you were going to obtain multiple refinances on your home loan
    https://www.ozbargain.com.au/node/703294

    Now you want to buy a house and quit your job ………….

    • StingyBritches on 28/06/2022 - 10:17
      +1

      Heh. Heh.
      The OzBargain Investigations Agency always gets their man/woman!

  • cupcake on 28/06/2022 - 10:27

    You can't get anything for $1 million in Sydney lol

  • AlanJ on 28/06/2022 - 10:53

    While I think it's a great idea to swap a job you don't like (even if it pays well) for a job you do like (even if it pays less), and it's also a good idea to buy an investment property when the market is slow, I think your safest course of action might be to just wait a few months before committing yourself to either course of action. That's a good salary, and you will, hopefully, be able to save quite a bit in the next twelve or eighteen months, and that's to your benefit if the market continues to drop (which is pretty much a certainty). Buy the property when you believe the market has reached its bottom, but do that well before changing jobs, as there are always complications and unexpected expenses with every purchase; even if you don't much like the work, you'll appreciate the security and the income when you start to encounter the complications. When the investment property is up and running and you have a good, stable tenant, then by all means, go after the job of your dreams.

  • 2esc on 28/06/2022 - 13:03

    Remember just because you have pre approval of 1 million doesn't mean you have to. Find a small unit or cheaper house somewhere so you don't have the stress of servicing a large loan it may mean moving to a different city or further out. Though they are going up in price too but when will be the right time to buy?

  • Peck on 28/06/2022 - 13:58

    If you think that 'this' is a 'bear market' then you-aint'-seen-nuffing-yet!

  • Gros21 on 28/06/2022 - 18:03
    +1

    This is a stupid idea. Taking on a massive loan with no income.

    Same applies to people who purchase a house or a new car while partner is pregnant, knowing there income is going to half with a extra mouth to feed.

    If you are going to plan to earn 4-500 pw while starting a business that's likely going to bleed money for first few months that's if it's ever going to make money.

  • Homr on 28/06/2022 - 18:32

    why are you quitting your job? $140k is good money, I wish my job pays $140k

  • amoo-handy on 28/06/2022 - 19:23

    thanks for all the Trolls and the genuine comments

    Few things I should have mentioned is that im a single male living at home
    Current investment unit is rented and Im roughly $100-200 a month out of pocket which is manageable
    New property will be an investment house and I will be roughly $1000 out of pocket a month at the current interest rates
    So repayments are kind of manageable for a few months if I dont end up making a cent after quiting

    I have been in the side lines with property for about 3-4 years and and have probably missed 2 upside cycles so I dont want to miss out on another one

    What I have gathered from these comments is that its prob best to stay put for a few months and get something next year
    Considering the new stamp duty options coming into effect next year I think property shouldnt drop too much

    Peace

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