We just don’t know what to do!
We are both self employed. With very little super. Aged 46 +47. We can borrow up to 200 000 to use as deposit(s) and can then borrow up to 80% of the value of a property/ies. We currently rent and pay about 650 per week . We don’t have much in the way of savings and do have some substantial credit card debts which we are just paying monthly dues on. We paid off my mother’s mortgage some time ago and are on the deeds of that property which would be used as security for the low doc.loan(s).
We have renovated properties in the past and can’t decide whether we should buy one “renovator’s delight” to do up and live in and then flick or whether to buy a small number of studio or one bedroom units to rent out and just stay renting where we are.
Our contingency plan is that if needs be we could live at my mother’s property however this involves a massive and expensive commute each day.
We just can’t seem to make a decision and would welcome any thoughts more experienced and financial savy contributors might have.
When you say you have little super then perhaps proeprty could be a retuirement vehicle for you and you might want to consider buyng and holding rather than flicking for short term gains. Longer term capital appreciation might be a better option for you for wealth building. If you chose that route then my feeling is you'd get a stronger capital growth from anything with a little more land content and perhaps adding value by rennovating, build the equity and then use this for further purchases or upgrades. You just need to be able to service the debt in these times. If you decided to never sell these properties and live on the rent you also remove any GCT issues.
With regards to living at the folks and the lifestyle change, if you think you can get a better return with doing this it might be an option but I've had clients go stir crazy in a very short time!
If you are thinking of using the mums property to get a loan it won:t be that easy, especially if she is not working. lenders are extremely reluctant to do this.
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
Obtaining a lodoc loan especially a refinance wont be easy unless you have BAS / Trading post NCCP.
Also high Credit card debt will also have a bearing on your Credit score so the firstthing i would be doing is getting rid of this as quickly as possible.
Again with limited information it is difficult to make any real suggestions on funding.
By the way financing a studio unit on lodoc could also be fun in the current climate.
Richard Taylor | Australia's leading private lender
As the boys are pointing out, might be tough till you clear the debt. In the meantime, perhaps start shovelling money into a SMSF (Self Managed Super Fund) and use it in a year or two to buy property? (ie the Super Fund buys the property) Benefits are of course money going into it is only taxed at 15%
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Thanks for the feedback. Both loans (for the 200k and for 80% of new property/ies have approvals in place) so we are set to go. It is more a matter of whether we are best to buy and rent out say 3 studio or 1 bed apartments, a house of equal total value to those that we rent out or to buy one we live in renovate and sell on. So still very confused by the different options. We are looking at the bigger of the two loans being up to a max of about 828k (but using the 200k as deposit and renovating money) so it is really how best to treat that amount for best return.
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