If things work out I will looking at my first IP property in the above area the older part, Boronia Heights is approx 32klm from Brisbane. The property is as they say a dog in a good street and location, being close to schools, transport and shops. The house is 3 bed highset house with a brick and fibro base on just under 800sqm.
My plan is to have the place purchased and renovated (I will doing the renovations) for around $250000 the current rents for the area 320 – 340 (from agents) I'm basing my figures on 300 a week which gives me 5.75 – 6.24% allowing for 4 weeks vacant, I intend to hold on to the place as it is just in the negative by about $25.00 a week + expenses (rate, insurance etc)
Currently RP data indicates 315 a week rent, annual rise of 7.1% a year and medium house prices 332000 althought this place not being all brick I'd say value is more arount 285000 – 290000.
My purchase plan (hope I got it right Richard) is to increase equity from PPOR current value appox 600000 with 160000 owing. Increase my LOC then transfer funds into a seperate bank account to purchase and renovate the property, once completed, get the place valued and refinance with IO and offset or LOC as much as I can.
So I guess I'm asking what are your views on Boronia Heights, my figures re rents etc, and purchase plan. Am I looking at the right things or am I barking up the wrong way. Are there things I should be looking at?
I know a lot depends on the purchase price, the budgeting on the reno is no issue.
Brian
Brian thats a sizeable reno at 250k
Sorry the $250000 is to purchase and is inclusive of $40000 reno. The purchase price is the key, I have set my dollar limit to purchase, if I cannot secure it below that I'll move elsewhere. I would prefer to
Although I have no issue in a $250000 reno (not on this place however).
Brian
Hi Brian
Almost right but the theory is that you would use the LOC to funds the deposit, acquisition costs and in this case renovation and other expenses and then take a standalone loan on the IP.
Might want to set the LOC up nice and early as refinancing or restructuring can take a few weeks and the Selling Agent may require a deposit up front which ideally you would take from the Line of Credit.
Richard Taylor | Australia's leading private lender
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