Bought Small Apartment, Give This Kid Some Advice

arkhos on 04/08/2024 - 14:46

Hi all,

I bit the bullet and entered the real estate market with a leverage of about 53%. I bought a honest 2b2b which I will live in and probably sublease too (not decided yet). I paid my 10% and I am currently waiting for settlement. As the place is leased out until December, I will suck it up until then getting a rent which falls shorter of my prospected mortgage by about a $100 per week.

I'd like to collect financial advice from the experienced ones about next steps. In my naive mind, on settlement I will transfer out the cash and start paying my mortgage. But surely there are better ways to do this operation. I was wondering, for example, if there is a better vehicle than a bank transfer to do that to reap benefits (e.g. Qantas points). Given the enormity of the transfer, I could easily match high-spend credit card plan.

thanks all.

Financial

Comments

  • djones145 on 04/08/2024 - 14:56
    +5

    eat rice
    https://www.google.com/amp/s/www.news.com.au/finance/real-es…

    • this is not fiancial advice and general advice. for financial advice please see a financial planner
    • Trying2SaveABuck on 05/08/2024 - 12:38

      eat rice
      https://www.google.com/amp/s/www.news.com.au/finance/real-es…
      this is not fiancial advice and general advice. for financial advice please see a financial planner

      i swear these articles are getting worse
      “Avocados aren’t really that expensive. You can get them for less than $2 sometimes and get them in the imperfect pick bin"

  • dasher86 on 04/08/2024 - 15:00
    +6

    Don't buy apartment. /End.

    • neoleo on 04/08/2024 - 21:07

      He has bought it already 😂
      Your advice is too late.

  • JIMB0 on 04/08/2024 - 15:15
    +3

    Move in and sub lease from the current tenant. Then when their lease is up sublease to them.

  • Duckie2hh on 04/08/2024 - 16:32

    Interest only loan. All repayment goes into offset.

    • echelon6 on 08/08/2024 - 16:34

      why? pni lower rates
      they come with offset accounts too

      • Duckie2hh on 08/08/2024 - 16:43

        So when OP finally moves on buys a new PPOR, all the money in the offset could be moved over to the PPOR account and suddenly the loan against this first property becomes tax deductible. Yes P&I also has offset, but by going IO, you are maximizing any future deductions on interest as well as improve your day-to-day cashflow.

  • star-ggg on 04/08/2024 - 16:51
    +2

    As the place is leased out until December, I will suck it up until then getting a rent

    Note this means, you must treat it as an IP in future sales. Ie work out the % of time it was PPOR vs rental during your period of ownership.

  • Tee Rex Arms on 04/08/2024 - 17:58

    You want to live with randoms or known friends?

  • screensaver on 04/08/2024 - 19:16
    +5

    Join the strata committee

    • renster72 on 05/08/2024 - 07:53
      +2

      very good advice, being on Body corp is a job no one wants but helps keep fees in check, also find out how much in sinking fund etc..

  • screensaver on 04/08/2024 - 19:19
    +3

    make sure to give legal notice to tenant before end of lease

  • Benoffie on 04/08/2024 - 19:47
    +2

    Usually youll find your mortgage account cannot be paid to by a credit card account. You generally have to go through a 3rd party service.

    Because most of us are running offsets, Im not sure this level of mess is something many of us worry about (but I could be wrong). Youd also have to account for fees etc on thousands a month just for FF points 🤷‍♀️

  • screensaver on 05/08/2024 - 08:25
    +1

    Heres the stamp duty exemption/concession guide https://www.aussie.com.au/home-loans/first-home-buyer/first-…

  • sandman20104159 on 05/08/2024 - 08:49
    +1

    just live where you currently are till its empty then live in it and enjoy the place all to yourself, as for moving money, just do whatever you want.

  • jv on 05/08/2024 - 09:25
    -1

    Give This Kid Some Advice

    "Always try your best."

  • try2bhelpful on 05/08/2024 - 14:45
    +1

    I would ask the current tenant if they mind meeting up with you for a coffee, or a glass of wine, so you can get the lay of the land before you move in. Who the movers and shakers are? What are the pain points? What needs fixing around the place. They might say no but it might give you a head start.

    All the best for your place.

  • rodericb on 08/08/2024 - 11:12
    +1

    Investigate "rentvesting" where you rent your place or and rent somewhere else. Have this apartment as your PPOR for six months or whatever so you qualify for the ATO's Six Year Rule.

    • arkhos on 10/08/2024 - 12:44

      great advice

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