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An early introduction to property

I have a son at home who is at university, but is earning quite a good income from a part-time job. As he looks like he will be living at home for a few years without paying rent, I’d like him to get into real estate early by way of buying a rental property. Do you have any ideas?

The starting point is to see if his income is good enough to borrow money. A visit to a mortgage broker and a bank makes sense to test out the market. You might have to be a guarantor to make it happen and that can be risky even with loved ones, so make sure of what your obligations might be and what can go wrong.

Looking for a positively geared property would be a good idea because the rent will be more than the interest repayments and possibly the other costs. You can use the Yahoo! search engine to look for positively geared properties. Be careful of properties in one-industry towns. I saw some properties in a coal town that were great as long as the coal mine stayed open. Places like Toowoomba and Townsville have been favourites for this kind of investment, but it doesn’t mean they will always work for everyone. You have to do your homework and work out the risks.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

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Published on: Thursday, November 04, 2010

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