Greetings All
Congratulations to you all that have made the move and invested in properties. I hope this forum has been of help to you. I have been looking around for a few months now and using the formula’s set out in Steve’s book recently as a guide asking agents and the housing trust for what they have available here in South Aust. They all keep telling me I am 12 months too late. However im not ready to give up and ready to listen to advice offered.
I am currently on a careers pension looking after a dear friend and a sole parent father. I have little prospects of employment myself due to past injuries. I have very little savings but a mortgage free home valued at approx 150k which I would rather not mortgage again but will if I have to get started. Can any one offer me any pointers?
I have read Steve’s book and even tho I had been thinking along similar lines to him I never had the nerve to risk it all for my kids sake. I now feel comfortable enough to take the plunge and am confident enough to make the right decisions.
Any feedback would be greatly appreciated.
Regards
Peter Ruwette
Hi Peter [
]As you no doubt know lenders are a bit shy of low/no income situations but if you hook up with a good broker and aim at positive cash flow properties you could actually do quite a bit with your available equity, cross-collateralising the security against your home. Lenders will take 80% of the rental towards servicing the loan so I’ve given you an example of making two purchases with your equity:
Current value – $150K
New IP1 – $100K
Rental income – $200pw = $10,400pa @80% = $8,320pa
Loan $105K (extra $5K to cover costs) over $250K equity
Repayments approx $7,700 paThe investment income covers the loan.
This is fairly basic but you get the idea?
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Mel
[email protected]I don’t want to be a kill joy Mel, but your figures don’t allow for a tax component ? Surely if tax is paid on the income from rent, there can’t be enough to repay that loan, or am I mistaken ?
Thank you Melanie your advice is greatly appreciated.
Thus far I can only find lenders willing to borrow up to 65% but considering I don’t wana risk any of it 65% seems to be a good amount for me ….LOL
I’m wondering how many other people come across agents saying they are 12 months too late. I’m wondering if they are trying to hide the good investment properties for themselves……..LOL I’m sure they are out there, after searching the net tirelessly and countless amount of phone calls I haven’t even come across a property meeting the criteria for purchase. But I also know good things come to those who wait……LOL
Thanks again Melanie
Regards
Bear
haha!!! people will be saying ‘you are 12 months too late’ forever.
Hey, you might be 12 months too late to get 12 months ago ‘s prices, but cast forward 12 months and the same will be true…you dig???
yes mini you are right
i know that last year i was buying houses (in Millicent SA for 50k)and people were saying you could have bought them 10k cheaper 12 months ago. since then they have gone up 40k.
i’m not saying to you you should buy, but i am buying myself.
Be careful how much you take notice of realestate agents. they aren’t investors themselves (most aren’t) most don’t even own 1 investment property. so don’t take investment advice from them, weigh up what they say but they are only real estate sales people. occasionally you meet some switched on ones.
As for as trust homes go check out Elders they have the contract to sell trust houses in SA outside adelaide (they auction them). If i was buying in SA now i’d be checking out Whyalla. i know they had cheap houses a while ago.
westanThanks Westan for your advice we must be thinking along the same wavelength, as Whyalla and Port Pirie is where I am currently concentrating but still haven’t had much luck with the formula. I have also contacted the appropriate Elders office and believe it or not I am told they are all away sick…… Port Pirie is one place im told im 12 months too late. I wont give up ill just keep plotting along. Thanks again for every ones input. Sometimes we just need to hear we are on the right track when 1st starting, and it certainly seems with the feedback that I am.
Regards Bear
yes mini you are right
i know that last year i was buying houses (in Millicent SA for 50k)and people were saying you could have bought them 10k cheaper 12 months ago. since then they have gone up 40k.
i’m not saying to you you should buy, but i am buying myself.
Be careful how much you take notice of realestate agents. they aren’t investors themselves (most aren’t) most don’t even own 1 investment property. so don’t take investment advice from them, weigh up what they say but they are only real estate sales people. occasionally you meet some switched on ones.
As for as trust homes go check out Elders they have the contract to sell trust houses in SA outside adelaide (they auction them). If i was buying in SA now i’d be checking out Whyalla. i know they had cheap houses a while ago.
westan
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