hi,
Me and my fiance are new to this forum and new to investing. We currently have a house on the Sunshine Coast
QLD that we got valued at $480,000 and have now got a LOC of $68000.
We are looking at getting a IP but don't know where to start looking and what to look for. eg) what location and what type of house(new/older).
We are in a position financially where we can afford to support the IP but not to much as we are getting married in
October and need funds for that also.We have a place on the sunshine coast which we have just put a contract subject to finance on for $400,000 and will
rent out for $390-$400 a week but this will leave us with having borrow 97% and pay a large gap in the IP loan.So do we look for something cheaper(not much really cheaper on the coast) or look elsewhere???. We are nervous to purchase elsewhere as we dont know the area's or demand for rentals (sunshine coast homes have 20-70 applicants per home). We have been thinking of gympie as houses are cheaper ($330,000 and can rent at $300pw) and have been told that it will boom there soon but
we just dont know what to do. We are that nervous that sometimes we think it will be that much easier to not do anything
but i want to secure our future.Sorry for the long story and any suggestions/ideas will be appreciated
thanks
shane and cassiehello
it is all about balance, if you cant sleep at night due to worry then buy something cheaper, as long as you make a start you will build confidence with time.
I know how you guys feel, sounds like me 2 yrs ago! For starters you might like to think about some property goals, as in why am i investing in property – how far do i want go with property etc. Once your in you'll be hooked like the rest of us. One hint tho, i have brought and/or built on the sunshine coast and found it does tie up a lot of your borrowing capacity (due to higher prices etc), so like your already doing maybe look further north, most lager regional centres b/w gympie & cairns is doing pretty well. But make sure you do your home work. Research local markets and if your not sure about rental demand, check on line or touch base with some local agents. One other thing tho – make sure you get a great 'team' of pro's around you, eg mortgage broker, accountant etc, chelsea from Momentum Home Loans has been great for me 0438042058 anytime. Happy investing. (hope i havent overwhelmed you with info here!)
Enjoy your courage! Go for it!
Would the real Chelsea Bouma please stand up.
Great post praising yourself but I ask you.
Shane and Cassie first i hope all goes well in October and congratulations to you both.
Certainly the Sunshine Coast has seen spectacular growth over the last 5-6 years and there is no reason to believe this will not continue. Also the rental demand is increasing and is an encouraging sign. The price you are looking to pay is certainly not over the medium price for the area.
From a mere cash flow perspective there will be a shortfall in the rent v interest repayments however depending on the age of the property will determine the amount of non cash deductions i.e Depreciation and Building Write off you can claim and this will certainly assist you in your weekly calculations.
Structuring the loan is very important so consider whether you use a simple Trust structure or you purchase the property as Tenants in Common. Also i am not a great lover of cross collateralising the securities so make sure the loan is a standalone deal away from your PPOR.
Correctly establish you can ensure that the rental funds can be chanelled into the offset account linked to your PPOR (I prefer this to a LOC) and then dripped out monthly to support the interest only loan on the IP.
Your Mortgage Broker should be able to assist you in the correct structuring of the loan.
Richard Taylor | Australia's leading private lender
Hi guys…
point one you wont get 97% on the IP loan, I am assuming you think that it will stand alone… 90% Full doc is the maximum.
Personally (and professionally) I prefer the LOC its more flexible especially when you have a fully capitlising one. Heres the problem… you wont get a fully capitalising LOC with a bank… you will have to go with one of the mortgage managers… make sure you get a Cannex rated loan, 4-5 stars… it depends on what structures you require in the loan.
God bless u both and have a wonderful day on your wedding.
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