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  • Profile photo of supachef196629273supachef196629273
    Member
    @supachef196629273
    Join Date: 2003
    Post Count: 6

    Hello Everyone,
    I was wondering if someone could share some knowledge regarding finance.
    As with the majority of people that subscribe to this forum I aspire to achieve the goal of becoming a professional investor.
    I have always acquired finance for my properties through the traditional means of using my salary working as a chef to fund investment loans as well as a percentage of rental income.
    However every time ive purchased a new property ive had to refinance.
    My question is simply this.How do keep borrowing for further investing when the only income received is from property investing?
    Is there a formula that I should apply about structuring finance?
    Any thoughts would be greatly appreciated.
    Thank You.[biggrin]

    Profile photo of woodsmanwoodsman
    Member
    @woodsman
    Join Date: 2004
    Post Count: 714
    How do keep borrowing for further investing when the only income received is from property investing?

    With extreme difficulty. Even if you had a fully paid off property worth $500k, at a 4% net return, this would still only equate to $20k income. Rent reliance may then become an issue.
    And whilst you might use this to invest in shares and achieve say 10%, this is still only $50k.

    Serviceability models tend to take approx 30% of PAYG income, 75-80% of rental income and approx 50-60% of dividend income (or so I have heard) At least initially in your investing career, PAYG income is significantly greater relative to rental income.

    Don’t give up your day job – yet, at least..

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