First homebuyer opts to invest

By Your Mortgage

With a builder for a dad and two brothers in the industry as well, Laura Taylor, 26, says she was "always immersed in real estate".

"Property is in my blood," she laughs.

"I studied for six years, and while I was at university I had no money to save a deposit and buy a home. But as soon as I started working, I knew I wanted to buy my own place."

So she spent three years reading property investment books, attending seminars and learning as much as she could about the subject, with the intention of buying a house that she would want to live in but which could also have future capital-growth potential.

By 2007, Laura was a university graduate working as a doctor, but she didn't allow the sudden increase in income to change her spending habits. Instead, she set about saving a deposit in six months by "living really cheaply".

"I didn't go out much," she says, "and I didn't buy new clothes – I just cooked more meals at home."

Laura quickly accrued around $11,000 and bought her first home in November 2007, paying $226,000 for a five-year-old two-bedroom apartment in Ballarat.

"My intention was to buy it as a principal place of residence, and I lived in it for 12 months once it settled," she explains.

She continued to spend wisely and paid as much as she could off her mortgage during that time. The balance of her initial principal and interest loan was $214,700, but now, just over 12 months later, she has paid it down to $195,000, giving her equity of $31,000.

Recently, Laura was offered an opportunity to travel Australia as a locum or freelance doctor, so she quickly found a tenant and hit the road.

"It was a lifestyle choice," she says. "I'd always wanted to travel, and this job opportunity gave me the ability to do that and work at the same time."

Laura receives $225 per week rent for her apartment, a total of $11,700 per annum, and calculates her costs at around $18,000 including depreciation, so the property is negatively geared.

She is about to convert her loan to an interest-only facility so her outgoings are more tax-effective, but she is happy to deal with the small financial shortfall in the short term.

"I'm going to convert it to an interestonly loan but, at the moment, I only have to chip in $100 a week and, with my job, I don't pay rent, so it's not a huge amount to fork out to own my home."

As a locum doctor, she travels around Australia with flights and accommodation paid for. "Right now, this suits me," she  explains, "but next year I want to settle down and work in Queensland."

At that point she will "probably rent" for 12 months so she can continue to save a deposit. Then she wants to buy another home to live in some time in 2010.

"Hopefully, by then, my first property will have a bit of equity in it, which will help me to buy the next one," she says.

"After that, I plan to keep buying investment properties!"