Hi all
Currently I'm working FT and income @ 85k p.a. with about 40k cash. Living in N.Western Suburb near to Caroline Springs. Owing to Bank about 288k and house value around 380k-400k
I'm seeking to invest in property on house(s) with minimum -ve gearing. What are my options in terms of Suburb of choice? and what to stay away from?
I'm still very very new in this arena so any help very appreciated
Hi jackyngew
The overriding factor is going to be your ability to service (ie pay back) your home loan and also an investment loan. The banks tend to only count 80% of potential rent as likely income. It looks to me like you're on a principal and interest loan, and are paying almost $2k per month towards your home, does that sound about right? If that is the case, you've realistically got about $900 a month to spare for investments. Does that sound about right to you?
Some people will take the opinion you should knock your home loan down more first (as the interest is not deductible). Others will have the opinion that you should get an investment property. I don't have an opinion in this regard.
If I were in your shoes and had decided to get an investment property, I'd probably want to be a bit conservative. You don't want to back yourself into a corner financially and be unable to afford the situation if you have a vacancy, or a tenant that doesn't pay rent.
Perhaps take a look at a property in Melton, or perhaps a unit in Ballarat?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
You'll get plenty of feedback on this topic!
For me, West Heidelberg and Seaford.
There's also plenty of other great posts on this elsewhere on the forum.Hi JacM
Thank you for your suggestions! You're mostly right and first of all my apologies. I just realised I left out my partner side of income. She make about 55k p.a.
By the sound of your suggestions, seems like there'll be very different suggestions nowHi christianb
Thanks for your suggestions. Seaford seems like a good name
West Heidelberg was part of my consideration but not sure the rentability of that suburb tho.
Right well yes extra money in the pot changes things!
Obviously you guys need to work out whether you want to buy in joint names or what. Relationships can break down, and it can cost a lot of money splitting up the assets.
That said, if you proceed, it is probably best to put the investment property in your name, simply because you are the higher income earner and therefore there are more tax breaks to be had negative gearing on your salary.
How about an I.P. unit in Northcote, and at the same time, plunging lots of money into your own mortgage? (well, not onto the mortgage – into an offset account instead so you can pull the money out later if you want to)
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
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