Hi all,
I'm in the market for my first IP. I've gotten preapproval for a 200k loan i.e. PP should be around $165000 at LVR 90% with NAB. LMI is about $1400. Is there any other lenders I should be looking at to getting a better deal?My options for investment are studio apartments situated around Melbourne University within a 5- 10 minute walk, however these are generally all student accomodation. I'm only looking at places with rental yield of gross 9-11% so net above the interest repayments at minimum.
Problems are that new apartments are being built around the city so supply will be high and demand probably constant? How will the building of these new apartments affect rent and vacancy rates?
Are student studio apartments hard to rent out at say 300-$350 p/w?
Does the level on which the apartment is situated on affect rent/ vacancy?
I'd imagine capital growth for these kind of apartments will be nil or very little as well.I will be earning approximately 26,000 after tax as I'm still studying full time so negative gearing wouldn't affect me if anything (not sure how negative gearing can be beneficial for high MTR people… if someone would be kind enough to explain)
Coupled with the uncertainty in property prices and expectations for property to drop… is this a worthy investment? Will an apartment of such value drop substantially in price if there is a drop or would waiting it out until prices crash be a more suitable option?
I think you already know the answer to most of your questions.
Regarding hte $350pw… have you checked what similar accommodation is renting for on http://www.realestate.com.au/rent ? $350pw sounds high for a student to me.
The other thing you might not have considered is that NAB might not be too keen to loan you 90% on student accommodation. The % they are offering might be a lot less. Further, lenders are not keen on financing dwellings that are less than 50sqm.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
As JAc has said for question you have to ask is what LVR can you get on these properties. 90% on a student apartment may present some challenges.
If it is your typical student style City apartment (We have similar in Brisbane) then i think you will be lucky to get 65% lvr let alone 90%.
NAB wont touch them even if you are a gold customer at that lvr.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
You must be logged in to reply to this topic. If you don't have an account, you can register here.
