# Be a Property buyer or investor?



## joeman (Jan 14, 2010)

Dear all,

I am very thankful that I found this forum and is much better than the expat forum as there is a better mixture of views compare to that forum which has a bias view.

Anyway, after struggling for a few months in Melbourne, my spouse and me finally settle down to our permanent jobs and we are now starting to look out for properties. We got some verbal approval from our banks.

Most of the properties in Australia in good locations are very highly priced and we calcuated at the current interests rate from 7% to 8% for a $700,000 property, we will be paying the Bank back after a 30 years loan - AU$1.8 million !!!. I am not sure if that is what I want to do in my life - to be a slave to a house. I want to retire and be financially independent.

Someone offer an advice to me to use reverse gearing method. I can be an investor and buy a bigger property in a good location which has potential growth and rent it out and will get rebate back from the government and reduce my overall tax. In return, I can rent a place near my work (city area) and offset the rental in both way. This is sometime new to me as we don't have this law in our country. The downside to being an investor is that there is capital gain tax (CGT) of 50% upon selling the house. 

The question is can I can stay in my property assuming that after 15 years, I choose to retire in my investment property, which is a bigger house and away from the city but in a good location ? What are other downside other the CGT that I mentioned ? 

What about being a property buyer instead ? I know that this is a traditional mindset from our parents' time when we buy a house, have babies and retired as grand parent but I realised that the property prices has double within 10 years and this has made it almost difficult for anyone to retire with some cash. All I can bang on is hope that 30 years later, my property is the same price as my payment to the bank.


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## Dexter (May 5, 2010)

Yes, you can use negative gearing to invest in a property. It will be cheaper than living there and will make it easier for you to repay it. If you check google, you will find a few comparisons between investing in a property and doing cash investments.


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## joeman (Jan 14, 2010)

aisstep said:


> I worked in a real estate company before and found out that there is a big money in real estate. I said to myself that someday I'll invest in this kind of business.


Would you be putting your money to buy property now ? Buy high and sell HIGHER ??


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## pencilpusher (May 12, 2011)

Everybody is gearing up for a downfall of property prices, but it's in the rise. Think it will take sometime to let it slide down a bit. Immigrants have been coming over and you guess it...they will need a place to start a new.

Sell Without an Agent | Sell Your Own Home | Sell Your House Privately


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## jeremyh (Mar 31, 2011)

*movimg Sydney*



pencilpusher said:


> Everybody is gearing up for a downfall of property prices, but it's in the rise. Think it will take sometime to let it slide down a bit. Immigrants have been coming over and you guess it...they will need a place to start a new.
> 
> Sell Without an Agent | Sell Your Own Home | Sell Your House Privately


Yeah i agree with you with more immigrants coming it will only increase the property value.


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## jeremyh (Mar 31, 2011)

*moving to Australia*



portalmojo said:


> You can visit this site for more property options you can buy a commercial property here too. Hope this helps you.


Yeah you can visit the sites on Google and everything will be listed in front of you. Great thinking man.


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## myplace_11 (Jul 11, 2011)

You can be both, anyway these two can make you big time on real estate if you just have the knowledge.


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## chifin (Sep 30, 2011)

*Primary residence*



joeman said:


> I can be an investor and buy a bigger property in a good location which has potential growth and rent it out and will get rebate back from the government and reduce my overall tax. In return, I can rent a place near my work (city area) and offset the rental in both way. This is sometime new to me as we don't have this law in our country. The downside to being an investor is that there is capital gain tax (CGT) of 50% upon selling the house.


Joeman, did you sort out your property in Melbourne, or you still working out what to do. There are some other options (slight variation of what you have been told) available to you.

If you still want a hand, reply back.

Good luck


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## Investment Guru (Jul 14, 2011)

Right now it's a buyers market in Australia, Melbourne in particular. It's best to be a buyer now.
Get your best buyers agent and take advantage of the market this time. Who knows there will that pot of gold for you
at the end of the rainbow.

cheers


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## joeman (Jan 14, 2010)

I do agree that the tide are changing but it is still not down the cycle yet. When I talk about cycle, read Michael Yardney's website to understand where each of the properties in different state are.

Understanding property cycles

I am staying in Melbourne and the we are just into correction but prices may still come down a bit.

I have been actively looking around and only the 1 million dollars properties and high end has come down but if I am a First Home Owner, I am not entitle to FHOG grant once my house price crossed the $600K and therefore I am looking for house below that range.

Someone advice me that if I am coming in as a buyer now, you need to factor in a drop of your property and the bank may asked you to topped up your loan as you have negative equity.

Be prepare for that...


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## pencilpusher (May 12, 2011)

There will be properties that can cater to one's needs. It would really be a good idea to have a Buyers Agent if you are not quite sure about Investing. It's always a good choice.


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## ArizonaOz (Nov 25, 2011)

I would not purchase a home right now.

Houses in Australia are extremely expensive. A family can rent far cheaper than it can buy.

According to an article just published in the Economist Australian homes are overvalued by 58% compared to rent. (Sorry can't post links)

My 2 cents.


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