Buy close to the city centre
QI’m a 24-year-old trying to get into the property market for the first time. My salary is $85,000pa, plus I run a growing tutoring side business that is generating about $5000pa. I hope to grow this further, with more students and responsibilities over the coming months. I have saved around $70,000 in a low-interest savings account.
My other assets include superannuation ($21,000) and a small ETF portfolio ($5000). I use the CommBank Pocket app for trading, where I deposit around $1000 every month to invest in ETFs. With the current climate, my expenses are minimal, plus the fact that I am still living at home. What is the best way to crack the property market as a first-time investor?
I’m trying to utilise the government benefits, including stamp duty exemptions and the first home buyer grant of $10,000. What areas and/or suburbs do you recommend for investing in and around the wider Sydney area? I’m not sure whether I should purchase land and build a home, and then put it up for rent, or purchase an already built home.
Azar, I am most impressed with your savings, use of super and how you’re running your own small business. Clearly, you have a very good grasp of money, tax and government incentives.
An advantage of living for a fair few decades and working in the money field for some 40 years is that you do benefit from simply being alive. One thing I have learnt when it comes to property is demand and supply. The problem with buying land as an investor is that this is usually in areas that are opening up. This can be fantastic for young families: the ability to build and own a home is very special. But in your case it is about investment and one of the money multipliers when it comes to property is the scarcity of land.
So, in Sydney or any capital city, I would prefer to buy close to the city. This generally means buying an existing property. A city also means a major centre – places such as Parramatta are cities in their own right. My view is to buy in high-growth areas, with major public transport hubs, medical facilities, entertainment, access to jobs, entertainment and, of course, a decent cup of coffee.