I am in Perth .I have my first oportunity to purchase a house on a duplex block , have checked with the shire and it is listed to be able to have it split completey in two separate blocks of average 500m2 or simply rebuild as one entity with adjoining duplexes on it .It is currently rented out .The water board says no easements on property, is clear prospect to develop .Has wide deep frontage on shire side to road .
I have $100,000 in savings , and have 3 other properties :2 houses + 1commercial unit rented out ,I may be able to get it for $300,000 .My mine job is under review ,(shaky) but current pay is gross $90,000.pa.
Would I be better off putting on it as much as possible to get a lower loan , or do only the bare deposit amount plus expenses and go interest only for say 12months .Don't know when I may be prepared to split block up , have never done a subdivision before and which would include a demolition .and possibly some retaining at fence lines , it is a sloping property up to the rear , on a main road with medium traffic.
At present place is a mess .May keep it rented out for some time a year or more … .But will have do a clean up and possibly maintenance .Current rents in area are about $300 p/w . Blocks average about $200,000 for current average block size in this far northern Perth suburb area.
It all depends on whether you are going to live in it and class it as your main residence (and not claim interest).
Put all your money against your main residence to save interest which is non-deductible and maximise investment loans.
So it if will be your main residence consider putting it all into the property. But I would still suggest you try to get a 80% LVR loan and then put the excess in a 100% offset attached to this loan. THis will save you interest as well as keeping cash available if you run into an emergency such as losing your job.
Also because you are going to split the place later I assume you will sell half or rent it, so keeping the loan IO with a high balance might work better later on when you need to apportion costs for tax purposes.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks for your input Terry , more than likely I will leave it as an investment property .When split up done sell all of it .
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