Investors or Business Owners

[stazza]

So recently I have been thinking on buying a block of land and building a house on it, knowing that I will be in debt for possibly the next 30 years. This makes me uncomfortable, as I work in FIFO industry and the work may well dry up in a few years, and finding as high a paying job after FIFO is unlikely. I'd love a house but I don't want to live beyond my means when my work dries up.

So, I've been thinking maybe putting my high salary in to good use by either investment properties or business.

This is where I have no idea where to start. A google search yields so many conflicting ideas and much confusion.

I need something I can start the ball rolling with very soon, and something that I can work FIFO with, so obviously not something that is high maintenance or that I'd need to be there every day for.

Would anyone recommend industrial lots to lease out? Or how about storage lots?

Any advice on where I can start?

Thanks.

[GasoLane]

I don't know if this is much help but I was reading a while ago that people are buying parking spaces (Syd Airport I think).

According the some of them they think it's great...no maintenance

(edit) found a start for you.... http://www.yourinvestmentpropertymag...rs-185306.aspx

[stazza]

Thanks man, that's interesting. I've had a bit of a look, doesn't seem to be much available in Perth at the moment.

I am seriously so confused as to what to do right now.

I know the SMART decision is to invest, as everyone has told me.

Although what makes me happy and feels like the best decision for me as far as happy living, is to build this house I really want to build and perhaps rent a room or 2 to help with the payments.

[Ruination]

You're probably best of seeing an accountant/financial adviser if you're serious in investing.

Wish I could help you in finding a good one to go see however, mine recently decided to retire.

[05_ENFORCER]

Do you have a Pty Ltd, Trust or an ABN as this will make a huge difference in your investment options?




.

[BIONIC MAN]

Industrial units can be good, as far as low maintenance and low risk of damage from tenants, not like it has carpet and furnishings like a house to wreck.. and most business tenants want to rent them for a longer lease than the 3 month wreck and run residential "guests"
usually can have fairly high percentage of rental return too.
But, commercial loans are often higher interest than residential loans, with more conditions put on them. sometimes commercial properties will have lower capital gain than residential properties, not always though, its all about getting a good deal in a growing suburb that has a demand for what it is your buying with any form of investment.

at least with a house you can live in it if you so choose to do so.. or rent it out and live in something smaller while you are still working away a lot of the time.
build a duplex?

[ebxr8240]

Decent deposit on house and rent it out? You have options if work changes.. Putting your hard earned in some one else's hands can be troublesome .. Easy for them to say sorry !! Money gone !! While they move to Spain etc..
Mind you if you think negative on everything ? You won't get anywhere !
Maybe buy a house but not too expensive.. Sheesh some of the prices first home owners pay !!

[buggerlugs]

Not troublesome at all. I'll e-mail you my bank details. You can park your money in my account and I'll really look after it for you, Trust me !!
I used to think Industrial sheds were a good investment but up our way, there are empty sheds everywhere and a lot of them have been vacant for a while.

[comagutsa]

buy the house you want and while you are working FIFO just hit it big time with your money, that way you get ahead of your repayments and win win, pay less in interest and cut years off loan life.
you can aways rent a room out or 2 also = more money to pay off home
i had a few houses when i 1st got into FIFO and negatived geared them, and i wont do that again ..whoopy you save a bit on tax but you are spending $1 to save 30c
you make your money when sell it ..if it has gone up that is.
got sick of it and sold them lost on one and made on the other. but still made money over all
better putting the money into your own place imo
or buy a house thats positive geared when you rent it out , better paying more tax and getting the house paid off buy someone else .

if you buy your own house and pay off as much as you can ..say in 3 years you lost your job and you cant afford the repayments (you can use the extra cash you have in the loan to help you with repayments till you find new job) or you can sell it and hopefully in 3 years your house would of gone up and you paid a fair bit off home loan,
so you end up with a good bit of cash in your hand ..
in 3 years on my house doing FIFO i and the wife have paid off $55k in loan and we are also $50k ahead of where we should be (so we can redraw that if needed) also spent approx $40k doing the place up over those 3 years, i now have approx $200k in equity after just 3 years.
always wanted to do the industrial thing to rent out but never ended up doing it as i'd rather a house i can live in

[zilo]

Don't go to a financial planner.

that's all the advice you need.

[cheap]

Originally Posted by zilo

Don't go to a financial planner.

that's all the advice you need.

Alternatively whenever I have a Financial Planner promising me wealth beyond my dreams, I ask them to produce their tax records and bank accounts for the past 7 years. They all refuse, there's a message

[Golioth]

IMO if you do not own a home now is to get one quick, as paying someone else's mortgage off is to be avoided if possible.

Option 1 - Buy a newish established home that ticks all your boxes, rent out a room or 2 and pay off as much as you can while you make good coin.

Pros - Rent income, for your use when off swing
Cons - Flatmates have run of place when you onsite

Option 2 - Buy a newish established home that ticks all your boxes, give it to a estate agent to rent out and you can negative gear. ( Your wage + rental income less house expenses, rates, bank interest etc = lower taxable income)

Pros - Should allow you larger tax returns (lower income). Work dries up kick tenants out and live there

Cons - Increased purchase costs (stamp duty), dealing with tenants and agents.

Do not buy a old fixer upper.
Buy a practical house (use your head not heart)
Do research of where to buy
If building be aware of time takes to purchase land & build house (lots of downtime before use)

Good luck with your decision making!

[Crazy Dazz]

You're right to be cautious about the future, however for the same reason you should stay away from business or industrial investments.
If the mining boom collapses, house prices will fall, BUT people still need somewhere to live. However industrial real-estate will COLLAPSE. At the moment, industrial real estate is GROSSLY over priced in WA. There is still a lot of demand, but that will go.

Your best bet is to invest in a combination of quality residential real-estate (in Sydney or Melbourne NOT Perth)
something for future development (eg growing retirement towns or buy out well in advance of the urban sprawl)
and shares in companies like Banks, Woolies, Wesfarmers, etc.

At the same time, plan and train for what you can do when FIFO work stops.

[Shonky.]

If you're on a big wage and expect you may not always be and want to take advantage of the opportunity, just save. Rather than jump head first into the wrong thing take your time and get it right. But in the meantime don't let the dollars slip through your fingers. Open an online savings account and start spearing money into it.

As for investments I reckon if you can choose something that interests you it makes it easier to learn about it and be successful

[CoupeKing]

Originally Posted by Crazy Dazz

If the mining boom collapses

Its a slow train coming. Kind of like an ice age.

[comagutsa]

Originally Posted by CoupeKing

Its a slow train coming. Kind of like an ice age.

i started when the iron ore was $20 US a tonne and they were making **** loads then .. they will still be making heaps and they are still pushing for record movement of tonnes, they are just watching were they spend money now

[nuthin' fancy]

Originally Posted by stazza

So recently I have been thinking on buying a block of land and building a house on it, knowing that I will be in debt for possibly the next 30 years. This makes me uncomfortable, as I work in FIFO industry and the work may well dry up in a few years, and finding as high a paying job after FIFO is unlikely. I'd love a house but I don't want to live beyond my means when my work dries up.

So, I've been thinking maybe putting my high salary in to good use by either investment properties or business.

This is where I have no idea where to start. A google search yields so many conflicting ideas and much confusion.

I need something I can start the ball rolling with very soon, and something that I can work FIFO with, so obviously not something that is high maintenance or that I'd need to be there every day for.

Would anyone recommend industrial lots to lease out? Or how about storage lots?

Any advice on where I can start?

Thanks.

Don't worry about the 30 year thing, it is only notional. Most people who start paying extra on their mortgage as soon as they get it (and with rates around 5%, you need to assume a higher rate of 7-8% when calculating your payments and then increase their payments each time they get an increase i income can achieve a full pay off in 12-15 years.

The biggest mistake you can make is to do nothing.

Don't buy the best (most expensive) house in the street, they are the ones that lose the most.

What will prompt your exit from FIFO, your employer choosing or you choosing?

Some ideas:

Buy two smaller properties with a view to selling one when your income drops

If you are looking to buy and build a house that will be your long term home, make sure you assess your loan capacity on what you are likely to earn after FIFO is finished and pay as much as you can off the mortgage while you are in FIFO

Look at other investment areas (shares do all the things that properties do from an investment perspective but do not carry the same physical risk. Don't gear too highly. Contact the Stock Exchange for information. Make sure you understand exactly what you are investing in. Don't just hand your money over to an advisor and hope he knows what he is doing.


There is no easy way to make money, you have to educate yourself so you know what you are doing. Don't leave it to someone else, that's where the horror stories come from.

People who buy and pay their mortgage ahead of time are streets ahead of those who are doom and gloom merchants and who don't do anything. The best time to buy a house was yesterday! It is only a cliche because it is true.

[stazza]

Thanks for the great info guys. I will just go ahead with my original plan of securing this block and building on it.

What will prompt your exit from FIFO, your employer choosing or you choosing?

The work is drying up, we've been told we have another 2 years on this job I'm on and then we're done, the other big jobs (Wheatstone & Darwin) are on now, so when I'm done here they will most likely be finished too. So my only option may be to work for a general crane hire mob in the city which doesn't garuntee constant hours or a decent pay check unless you suck some dick to get in the big cranes

[nuthin' fancy]

Originally Posted by stazza

Thanks for the great info guys. I will just go ahead with my original plan of securing this block and building on it.



The work is drying up, we've been told we have another 2 years on this job I'm on and then we're done, the other big jobs (Wheatstone & Darwin) are on now, so when I'm done here they will most likely be finished too. So my only option may be to work for a general crane hire mob in the city which doesn't garuntee constant hours or a decent pay check unless you suck some dick to get in the big cranes

In that case don't buy in an area that will see downward pressure on prices at the same time your income reduces.

[stazza]

I think this area may eventually gain value hopefully.

[05_ENFORCER]

Originally Posted by stazza

I think this area may eventually gain value hopefully.

Where are you looking at buying bud?


.

[deesun]

I can see a hole in the block and build idea. You wont be there to oversee work. What should cost you 1000 will now cost you 2000.

[carwant.com.au]

Have you considered a defence housing investment?
I think the website is dha.gov.au
I don't have a house with them, but have a look as their rental is guaranteed for 5, 10, or 15 years, with annual increases