I can pay off my house in 4 years pretty much on poor blokes wage!

EDManual · 09-09-2010, 05:20 PM

I am pretty wrapped with how things have turned out I must say!
Get this :

I am on a measly $35 grand a year, and am able to pay off my house after 4 years with a wife (doesn't work) and a kid, and we havn't had a budget or been careful with what we spend! Or tried to pay off the loan.(just paying interest only, with a bit more here and there when I can)

I bought a subdividable block in 2004 for $85000, build a house for $125000 on one side of it in 2006. Subdivided for about 10ish grand. (had a loan of 180,000ish at that point)
Now its 2010, have a loan of 165000ish, house is going on the market for 330,000. If I was to quickly sell it for say 310,000 I'll have $145000 cash to spend on another house on the block next door that would be fully owned! worth about $330-350000!

How about that! :-D!

And some people complain about low wages!... We go to France every 2 years too.

max · 09-09-2010, 05:39 PM

It all added up OK in my dizzy head. That is really thrifty! Good on you!

Pat Riley · 09-09-2010, 06:37 PM

This happens all the time, so I'm not sure what the purpose of the thread is?

Speak to some people who bought blocks in 2007 and tried to do the same thing. I'm sure they will have a different opinion on things. In a upward market, of course you will make some money, but in a downward market, you will likely lose money.

Also you are going to have to pay agent's commission and other costs on the property you sell which would further reduce the total consideration you get You will also struggle to build a house for $145,000. Depending on what you go for, it will likely cost you over $200,000 after variations for something reasonable. So you will likely still have a loan for $80,000 when all is said and done, and that doesn't include a proportion of tax that you would eventually have to pay on the second house for the time that the other house was your main residence.

Grippy · 09-09-2010, 06:43 PM

You bought your block at the right time, try doing that in the current market earning $35k a year

Pat Riley · 09-09-2010, 06:50 PM

Also if you are left with a $330,000 and a $80,000 loan on it, that's $250,000. If the house is built in 2011, that would be 7 years from 2004. In 7 years, you would only have to put away between $25,000 and $30,000 into a bank account earning interest on it and you would be in the same position.

EDManual · 09-09-2010, 07:03 PM

Quote:

Originally Posted by BA Falcon

Also if you are left with a $330,000 and a $80,000 loan on it, that's $250,000. If the house is built in 2011, that would be 7 years from 2004. In 7 years, you would only have to put away between $25,000 and $30,000 into a bank account earning interest on it and you would be in the same position.

I would be left with $330000 and no loan.

Also put 30,000 (deposit) compounded at 10% interest for 7 years is about $ 50,000 in 2010 and 12000 interest for 4 years when there was a house and land ($48000) but I would have spent it in rent anyway and maybe 3 years with interest on land only = 4000 x 3 = 12000, so All I would have had was the deposit with interest at a total of about $50000 plus the interest on the payments of the land only for 3 years ~15000 = $65000 best case.

$65000 or $330,000 whats better?

EDManual · 09-09-2010, 06:54 PM

Quote:

Originally Posted by BA Falcon

This happens all the time, so I'm not sure what the purpose of the thread is?

Speak to some people who bought blocks in 2007 and tried to do the same thing. I'm sure they will have a different opinion on things. In a upward market, of course you will make some money, but in a downward market, you will likely lose money.

Also you are going to have to pay agent's commission and other costs on the property you sell which would further reduce the total consideration you get You will also struggle to build a house for $145,000. Depending on what you go for, it will likely cost you over $200,000 after variations for something reasonable. So you will likely still have a loan for $100,000 when all is said and done, and that doesn't include a proportion of tax that you would eventually have to pay on the second house for the time that the other house was your main residence.

I could build a cheapish house for 145000 and it would be worth 330000 ish, and yes I could spend over 200,000 on something, and it would be worth 400000ish, whats the problem with that? Also I would not pay any capital gains tax, as I would sell my house at the moment, it has only ever been my main residence, and the new one will be too. I wont have both at once.
I am thinking of keeping a loan of about 80,000 and spending about 230,000 on a nice 2 storey which would be worth well over 400 more towards 450,000.

Anyway, all I'm saying is I was lucky thats for sure! A bit of advice from an uncle put me on to it. Thanks to him.

adelaidecrows02 · 09-09-2010, 09:10 PM

Quote:

Originally Posted by BA Falcon

This happens all the time, so I'm not sure what the purpose of the thread is?

Speak to some people who bought blocks in 2007 and tried to do the same thing. I'm sure they will have a different opinion on things. In a upward market, of course you will make some money, but in a downward market, you will likely lose money.

Also you are going to have to pay agent's commission and other costs on the property you sell which would further reduce the total consideration you get You will also struggle to build a house for $145,000. Depending on what you go for, it will likely cost you over $200,000 after variations for something reasonable. So you will likely still have a loan for $80,000 when all is said and done, and that doesn't include a proportion of tax that you would eventually have to pay on the second house for the time that the other house was your main residence.

Obv for someone to share their jubilation.........you must be a tax accountant.

Iggypoppin' · 10-09-2010, 12:40 AM

Quote:

Originally Posted by BA Falcon

This happens all the time, so I'm not sure what the purpose of the thread is?

Speak to some people who bought blocks in 2007 and tried to do the same thing. I'm sure they will have a different opinion on things. In a upward market, of course you will make some money, but in a downward market, you will likely lose money.

Also you are going to have to pay agent's commission and other costs on the property you sell which would further reduce the total consideration you get You will also struggle to build a house for $145,000. Depending on what you go for, it will likely cost you over $200,000 after variations for something reasonable. So you will likely still have a loan for $80,000 when all is said and done, and that doesn't include a proportion of tax that you would eventually have to pay on the second house for the time that the other house was your main residence.

Jeez, someone's a negative Nancy. Why don't you be happy for the bloke, it's far better that we get a quick thread about how good his life is going than hear of him going bankrupt(just the opposite end of the scale).

Pat Riley · 10-09-2010, 06:22 AM

Quote:

Originally Posted by Iggypoppin'

Jeez, someone's a negative Nancy. Why don't you be happy for the bloke, it's far better that we get a quick thread about how good his life is going than hear of him going bankrupt(just the opposite end of the scale).

Unfortunately I speak from experience. Whilst this worked out for most people up until 2006, I've seen too many people having to file for bankruptcy and go through the stresses that go with that being they overexposed themselves from 2007 onwards.

Generally their predictions are overly optimistic, and additional costs are often left out of their original calculations, and there's very little meat on the bone left after all is said and done. Just be careful is all I'm saying and get professional advice - it is worth it.

04redxr8 · 10-09-2010, 07:23 AM

EDManual, congratulations on your achievement, and good luck with moving forwards. Its always nice to hear of people who work at a goal and then succeed in makiing it happen.

@ BAFalcon.

Reading your posts here has given me the impression that you are posting from a self centered view point as opposed to a proffesional one as you are trying to imply. Your initial post comes across with a degree of jealousy outlined specifically in the opening remark.

While I appreciate that you are an accountant, and deal with figures daily, you seem to have forgotten that every persons situation is different. The OP has actually worked at his goal for 6 years, and it is now coming to fruition. At $35k pa he obviously hasn't been out drinking, taking drugs, gambling or being frivolous with his money. I also doubt he has been living beyond his means either, or he would have lost the lot.

As for the GFC, and other related matters that accountants and economists all cry over, history has shown that markets fluctuate. As an accountant i would have assumed that you could have see the merit in the fact that the OP has tried to do this overnight. He even gives me the impression that he was suprised himself at his great fortune.

The property losers of 2007 and onwards? are you for real? Property has never been a get rich overnight proposition. It never will be. If you buy a property and expect to double your money annually, you are a fool. Property is a long term investment. Always has been, always will be. In the past property has shown to be about a 7-10 year cycle.

These are merely my personal observations. I enjoy hearing of people success. I hate seeing jealousy. Your posts have attacked the OP's achievements while giving no usable or beneficial advice. I am not 100% on the capital gains law, but if he holds the land until such time as he can afford to build on it, and the land has not been used to earn profit, then why would it attract capital gains?

Further more, if an investment property is held for 15 years or more, and then sold, is capital gains no longer applicable?

onfire · 20-01-2012, 08:59 PM

Quote:

Originally Posted by Pat Riley

This happens all the time, so I'm not sure what the purpose of the thread is?

Speak to some people who bought blocks in 2007 and tried to do the same thing. I'm sure they will have a different opinion on things. In a upward market, of course you will make some money, but in a downward market, you will likely lose money.

Agreed.

Also consider the people who bought houses 15-20 years ago for next to nothing compared to today's prices, and how much those exact same houses are worth today.

If the original poster had some magical formula for purchasing a house, and paying it off.. well, that would be a different story.

blackers10 · 09-09-2010, 05:58 PM

sadly for us on that kind of wage now(or even 10k more than that) still can't get a reasonable house within koo wee of work)
congrats on scoring a good value house in a growing area

ea90gl · 09-09-2010, 06:02 PM

That's the beauty of "investing" in property, almost always pays off and then some. Just need the first one to be sorted to get the ball rolling

cant · 09-09-2010, 07:47 PM

Good for you pal

Buying a property is sort of like forced savings really, you have to pay the loan or the bank *#^$$ you

Saving is hard, thats why whats left over each week is known as "disposable" income ! Cause you more often than not SPEND it.

If you can save money each week you will be better off in the long term, and it doesnt have to be much, $30 a week adds up to $1560 a year or $15,600 after 10 years (then add compounding interest to that.............)

I bought a house in 2000 for 74K, paid it off 5 weeks ago, now worth 6-7+ times what i paid !!!!!!!!

Going without has its rewards !!!!!

Scott · 09-09-2010, 08:39 PM

Good for you mate, regardless of the finer details I like to see people getting ahead.

Congrats to you

GTPete · 09-09-2010, 09:03 PM

Quote:

Originally Posted by EDManual

I am pretty wrapped with how things have turned out I must say!
Get this :

I am on a measly $35 grand a year, and am able to pay off my house after 4 years with a wife (doesn't work) and a kid, and we havn't had a budget or been careful with what we spend! Or tried to pay off the loan.(just paying interest only, with a bit more here and there when I can)

I bought a subdividable block in 2004 for $85000, build a house for $125000 on one side of it in 2006. Subdivided for about 10ish grand. (had a loan of 180,000ish at that point)
Now its 2010, have a loan of 165000ish, house is going on the market for 330,000. If I was to quickly sell it for say 310,000 I'll have $145000 cash to spend on another house on the block next door that would be fully owned! worth about $330-350000!

How about that! :-D!

And some people complain about low wages!... We go to France every 2 years too.

Well done on making it happen on an income of 35k, imagine what you could do with the start you have.....

jono.chil · 09-09-2010, 09:26 PM

$35K / yr ain't poor mans $$
you're way richer than I am
try being on gov benefit payment(disability pension)
it's impossible to get a home loan to buy a house or even land in the first place
even on maximum benefit $$ paying for rent, bills, fuel & food is hard enough

If I had a chance to get a full time job(or could work full stop) & be off of benefit payments then I would jump on it.

Spudz27 · 09-09-2010, 11:11 PM

wow I am on 42k and my mrs on 35k and between daycare and **** we can't afford a house. Although due to a death in my family I have a large inheritance coming which will pay off my debt completely so I will own my car etc. The rest will be put somewhere and when both my kids are at school (1 is in pre school next year) we will look at buying.

reece1 · 10-09-2010, 12:10 AM

gk.ood on you ed, you having a red hot go and its paid off. dont worry about the could of wouldofs and didnt's. especcially if done you that on 35k its great. dont get carried away on next project just do what you thinks right and stay/live within your means. you done well. just keep doin what you doin an you will be o

ST · 10-09-2010, 12:46 AM

Good on you mate, to any naysayers; to be ahead or to break even at all in todays financial climate is something absolutely worth celebrating, especially when it's an everyday bloke like the rest of us.

Iggypoppin' · 10-09-2010, 12:50 AM

Quote:

Originally Posted by ST

Good on you mate, to any naysayers; to be ahead or to break even at all in todays financial climate is something absolutely worth celebrating, especially when it's an everyday bloke like the rest of us.

Hear hear!

seduced_xr · 10-09-2010, 01:51 AM

sounds like you made a few good decisions along the way! cant see myself getting my own place for a while :(. works un reliable.

RedHotGT · 10-09-2010, 10:46 AM

Housing is still very affordable in a lot of areas... Unfortunately a lot of people (particularly the young ones) want it all now.... they want to buy in the 'leafy' and 'trendy' areas...

I bought my house in 2006 for $168,000... a modest 3br home in Sunbury VIC
http://www.news.com.au/business/rich...-1111114248023
(Herald Sun actually ran an article on me / vs an investor)
Had it valued around 12 months ago... and the BANK called it at $260,000.... not a bad return on 4 years - given that I haven't done a great deal to the house (maybe tipped about $10,000 into paint/small renos)

I'm on a modest wage.... 3 kids (1 on the way) and a stay-at-home wife...
Its way cheaper to have my house than it is to rent!!!
And at the end of the day... I'll probably NEVER sell the house... just leverage off the equity to buy the next house... and keep it as a renter...
For the mortage that I owe on it... a renter could pay my mortgage - and give me some money to give to the tax man each year... but they'll be paying for the house not me...

It can be done... people just need to live within their means...
For the record - I just spent $25,000 on a Territory, and we go on a holiday every year also with the kids...

Find a balance where you can live and enjoy life...
And have a 'toy car' also...

sarrge2001 · 10-09-2010, 12:58 PM

Well done mate, nice to see a "good news story" on here.

Thanks for sharing.

Ignore the naysayers and enjoy the congratulations!

deesun · 10-09-2010, 01:35 PM

ED manual

Well done matey.
BA Falcon

, correct you obviously are an accountant.

2011G6E · 19-01-2012, 04:39 PM

Depends where you are greatly...we bought in Bundaberg back in 2000, for a pretty average price of $70,000 in a good suburb. Now our house is only worth about $180,000 to $200,000...we're putting $175,000 on it just to get rid of it so we can shift it quickly, but even fully renovated houses in that are are only going for $200,000.
Move a couple of hours up the coast to Gladstone and you're lucky to find anything under $350,000 for a hovel.

We'll be buying a place down in Rocky once we shift the Bundy house...you can still get good houses in Rocky for well under $300,000...as long as you check the council flood map first to see if the place you are looking at should really have a boat mooring attached to the roof guttering...

After that it's just a matter of discipline I suppose...pouring money into bricks and mortar and paying off the family home is the most important thing you can do with your pay packet...everything else comes a distant second.

HULK EF · 19-01-2012, 04:43 PM

Quote:

Originally Posted by 2011G6E

Depends where you are greatly...we bought in Bundaberg back in 2000, for a pretty average price of $70,000 in a good suburb. Now our house is only worth about $180,000 to $200,000...we're putting $175,000 on it just to get rid of it so we can shift it quickly, but even fully renovated houses in that are are only going for $200,000.
Move a couple of hours up the coast to Gladstone and you're lucky to find anything under $350,000 for a hovel.

We'll be buying a place down in Rocky once we shift the Bundy house...you can still get good houses in Rocky for well under $300,000...as long as you check the council flood map first to see if the place you are looking at should really have a boat mooring attached to the roof guttering...

After that it's just a matter of discipline I suppose...pouring money into bricks and mortar and paying off the family home is the most important thing you can do with your pay packet...everything else comes a distant second.

So the $70,000 was house AND land? and only worth $180-$200 thousand? um in 10 years time your place has well and truly over doubled in price! -Isnt that a great thing?

2011G6E · 19-01-2012, 05:56 PM

Quote:

Originally Posted by HULK EF

So the $70,000 was house AND land? and only worth $180-$200 thousand? um in 10 years time your place has well and truly over doubled in price! -Isnt that a great thing?

Well, not when you see how much other places have risen in comparison. Bundy is pretty dead for house prices, and people are really hoping on the big expansions in Gladstone, coupled with lack of anywhere for workers to live there, to make them come down to Bundy to buy and force prices up. Might happen, might not.

**ebxr8240** · 10-09-2010, 03:50 PM

Good on ya...Obviously your glass is 3/4 full ..
Unlike BA which is 1/4 M/T..

BTW if theres C.G on the land ?? Then surely you can claim expenses like land rates etc ?? An accountant would know that ????