Hi everyone,
My current situation is pretty good. My late father passed away last year, leaving the family home in my name. The home is valued at over 400k with over 95% equity availble to me. I’m currently earning around 50k a year in my job.My question is to all the gurus, i’m very interested in getting heavily into investing in the property market, however I dont know what to do?!
Should i borrow, against the current home?
How much could/should I borrow?
What investment strategy should I employ?
Negative gearing or positive gearing?Thanks for any guidance.[blush2]
SangDang,
Do you have any specific goals & objectives regarding investing?
What knowledge of property do you have?
Whilst on the surface financially, you might have the ability to invest immediately, I would ensure that you have ‘educated’ yourself in property specifics before you committ yourself.
(You may already have some knowledge, not sure).Ths current state of the market is ripe for young investors to make some errors. [worried] This and other on-line property sites are a good start, with a wealth of experience to leverage & learn off.
Whilst I realise this doesn’t answer your question directly, I think most of the people here have some overall strategy in their investing. You’ll find that this will provide you with the answers that you ask that is suitable for you.
If howver, you have already done this, then, you can disregard everything I have just said…[smiling]
Hi Sang,
Picking up from Woodsman.
I would suggest that you do some more reading and educate yourself in some of the many and wonderous ways that people can invest in property.
Duck into the ‘heads up’ forum on this board and see what book/reference recommendations people make. A coouple of these will help you further your investment knowledge and will start to help you clarify what it is you want to achieve and which ‘style’ of property investment suits your needs and situation.
While this is all happening you can start searching out professionals (brokers, accountants etc) that can assist you in your journey. These people need to understand what it is you are trying to achieve so that they can suport you along the way.
Consult with a broker who can determine your borrowing capacity and help you set your accounts up in a most effective manner so that your investment journey is more likely to succeed.
Once all of these ‘steps’ are concluded then you are in position to start seriouosly looking for a property that meets your investment goals.
Let this one bed down and then when the time is right for you look for number two and so on.
The position you find yourself in now means that you are well placed to use the equity available in your property. This can be used to set up equity loans/redraws etc to provide the funds for deposits on each property. A lender providing the balance of the funds on each occasion.
If you borrow more than 80% for each property you will be up for lenders mortgage insurance. While this sounds nasty it can stretch your equity further – this depends on your investment beliefs and goals.
As for negative gearing or positive gearing – that is ultimately up to you. I don’t mind a bit of negative gearing as I tend to focus on property in quality locations and closer to city and/or satellite city centres where long term growth is a know quantity.
Derek
[email protected]Property investment advice and researched property in quality locations available.
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