All Forum Posts by: Dean D.

Just want to say thanks to all who have commented. There are some fair POVs and a lot of food for thought. Just what I was after. Thanks again!

Hi everyone, 

My partner and I currently rent and pay ~$1,400 a month. We are in the position to be able to make our first purchase, aiming for the mortgage to be roughly the same as our current rental total. 

Does it make sense to buy now, given the current rates/ economic environment? Or should we wait? 

Would be helpful to hear some experienced opinions. 

Many thanks,
Dean

Thanks Jake, very smart. 

Hi all, 

I am looking at finding my first "buy to let" property. What indicators can be used to guide in deciding where to purchase a rental property?

I can do a search on a property site for a given area, but what metrics can be used to determine if it's a good place to buy? 

Is it number of available rental units? 

Is it price of rental units? 

General quality of available units? 

Etc.

Any advice is much appreciated. 

Dean

Thanks, yeah, I know there are inherent risks with it, so will be doing a lot of thinking before hand..

Hi BP!

I am looking at purchasing my first property and am looking at taking a loan from my sister, for the sum of ~15k. What are the best ways to make this loan fair between us? Some examples I can think of are:

a) Fixed interest paid back - If I loan 15k, and we agree on say 5% fixed interest over a period of time.

b) % interest paid back on resale of home - if/when I resell, depending on the appreciation % of the place I buy, I pay the same % back in terms of interest on the loan.

What does everyone think of these? Are there any others? Any other thoughts to share on this would be appreciated.

PS I know the downsides of taking loans from family, so would probably get something in black in white etc. if I do end up using this avenue.

Dear Antonios,

With all things in life there are pros and cons. My grandmother always taught me that when I face a tough decision, I should write down the pros and cons to each side of the decision. With doing this process, you can always see in black and white what the best decision should. Sometimes, however, it is not that clear, and you may want to use a decision weighted matrix.

Nonetheless, I can only offer some advice from my experiences. I left university during my second year. I first started studying Civil Engineering, which I found utterly boring, so I changed to major in Mathematics and Physics. While I really enjoyed most of the content, I felt at that time that university wasn't for me, so I left. I thought at the time that I was wasting my time and I could use my time more wisely than studying a standardised degree. That being said, herein lies the double edged sword - do you want to get book smart, or street smart? What I mean is, if you stay at university you will most likely get book smart (and this is not a bad thing). It will probably set you up in a good job, from which you can pivot moving forward. I went the other way and decided to try many different things and am still doing so. I have ended up working as a software developer for a large hedge fund without any formal qualifications because computers is where my ultimate interest took me - I would not have known if I stayed in univeristy! Again, with that being said, I find myself in a crazy work life (working ~60 hours per week) and studying a full time degree now, which makes it extremely difficult. I feel like I have done things backwards, but I can never know that because had I stayed in university I probably wouldn't be in the position I am in. This has now lead me to this platform where I am currently looking at purchasing my first rental property, a bit late at 30, but rather late than never!

With all this, I can only say do what you are passionate about and life will follow through. One of my philosophies is life is always working for you, you just have to make the waves through your passion and effort.

All the best with your future endeavours! 

I apologise if this post is a bit long winded, however, I am starting to look at my first home purchase (will be house hacking as per Set For Life by Scott Trench). As such, I am trying to understand how to objectively estimate a properties value relative to the area - I want to stress both the objectiveness and relativeness of this. Naturally as I am not a realtor, I cannot estimate a properties value, but I would like to do (in some way) is estimate its relative value.

With this approach I am thinking I can bring facts to the table when I find a place I like and want to negotiate on price (which I will leave for another post). Questions, or measurables that I can quantify, are things like:

i) cost per square footage

ii) no. bedrooms

iii) distance from public transport

What are other measurables around property purchases? And also, what are key questions to ask the property agent when viewing?

 Wow, this makes complete sense - I have had to think about it for some time to fully comprehend your strategy. I forgot to mention that I currently live (and rent) in London, UK so the market is slightly different. Although the market is slightly different I think the same principles apply - here it's 5% down payment for primary residence and 20% for buy-to-let. Furthermore, thinking about what you have mentioned, I may need to move out of London slightly to get a slightly bigger place, where I can lease out other rooms in the residence, which will accelerate the path to second and third properties. Thank you so much for the food for thought - definitely have my cogs ticking!!

Hi @Jack B, this is an interesting point you make RE purchasing a home first before investing in a rental property. What is your rationale around this? I am currently in a similar position to Debra where I am looking to buy a rental. I currently rent, and my rationale to buying a rental first is to generate net cash flow, rather than buying my own property where my equity is almost locked in to paying off a mortgage that I can only generate net cash flow if I house hack (rent out other rooms if more than a 1 bed). I'd be interested to hear your thoughts and what make sense to you.