We have found a property near the beach for $445K. house not too flash but rentable for now @ $370 per wk. we know this will be negatively geared. as being 1st ip should we start with a property this much neg geared (loan would be $600 a wk approx) so we need to make up balance. it would be tight but doable. don't know what to do should have capital growth in the area.
any assistance would be appreciated.
thanksIf you are so unsure maybe you should keep learning. You don't want to go too tight too, make sure you have a buffer for when things go wrong.
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
You could always make some changes to the property to try to up the rent. I agree with Terryw though, if you are unsure about capital growth etc I wouldn't jump into a property that is that negitively geared. Good luck.
Hmm. The rental return isn't great. You are asking if you should deliberately take on a property that makes a loss and that the budget would be very tight as well. I reckon you already know the answer to your question.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
The only problem with jumping into a property so negatively geared is that you may be limiting the potential to buy other properties.
A) You can't save money because you are outlaying all your money into the property
Even if you get awesome capital gains it may be hard to buy another property (if it were negatively geared) because you are outlaying so much money on the property.But a property just for the sake of it isn't the best idea. Learn more and buy a property you think will make you money. Have a strategy to get from where you are now to where you want to be. I am guessing forking out $300/week isn't what you would consider ideal
Ryan McLean | On Property
http://onproperty.com.au
Email MeI agree with Ryan. Properties that are highly negatively geared limit your borrowing capacity. At a quick glance, it looks like this property will be negatively geared to the tune of $300 per week. Can you afford this? Do you want to purchase more property in the future? Do you think it will appreciate in value by more than $300 per week?
Don't rush into anything. I'd spend some time learning – that more knowledge you acquire, the more confident you will be with the decisions you make (it will also limit mistakes and help with mitigating risks).
Cheers,
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
thanks guys,
we were thinking of maybe making this ppr in 5 yrs time as close to the beach & around the corner 1 mil+ properties. thought with the market being down could be a good time to get in as they should be increasing in price by 5 yrs time. well, it seemd like a good idea at the time.
thanksheapsIt still could be a good idea. You be the judge, not us. You know your situation and the property better than us. If it is right for you then there is no point letting us hold you back.
Ryan McLean | On Property
http://onproperty.com.au
Email MeWith properties like this where there is such a big risk it might be best to find someone to invest with for eg parents, siblings, cousins, friends and work colleagues etc. Like terry said you need a buffer. Good luck with everything though
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
have you considered the option of making it you primary residence and renting out your current property for less of an out of pocket expense? also is their potential to spend a small realistic amount that would increase your rent to make the gap a bit more afordable? Also the option of getting a valuation of what its worth now and say what you could receive in rent after proposed changes could make it more realistic. Its a matter of crunching the figures and seeing if its viable.
Even if you get awesome capital gains it may be hard to buy another property (if it were negatively geared) because you are outlaying so much money on the property.
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