Hi All
I am new to this site and keen to start investing and could benefit from some advice/ suggestions from those who have been in a similar position.
Plan is to commence a property portfolio, in forthcoming months. My immediate goal is to have at least 2 properties bought by Jan 2013. My long term goal is to stop working FIFO in 3-5 years and be a full time property investor.
Facts
$90k savings
Have no assets or debts
Salary 190k gross
Home loan pre-approved of $1,100,000
Interested in property in the Perth area.
Keen to buy a unit in Perth for $320000 and will put in an offer in 2 weeks.
Questions.
Anyone recommend a good financial advisor in Perth and a good accountant.
What mortgage would be best, ie interest only, or would it be best to start paying loan even though capital may be needed for next property.
Given salary would it be best to register as a discretionary trust from the start of this IP journey.
Any suggestions, comments greatly appreciated..
Regards
Pat Mc
.
Hi Pat
Welcome aboard.
I can't recommend a good financial advisor in Perth. Do you mean mortgage broker rather than a financial advisor? An advisor is likely to steer you away from property. A decent broker will work to your goals and structure your finances accordingly. Ideally, you want to use a broker that specialises in investment property financing – sounds obvious but you'd be surprised how many out there just don't have a clue when it comes to structuring for multiple property purchases.
Again, I don't know of anyone in Perth but location these days shouldn't be an issue – everything's done via phone and email so you have the entire country to choose your broker from.
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]
Maximum lending and I/O loan would be my advice.
Hi Pat,
I'm also from Perth. I have a couple of IP's now and I have found so far the most effective way is have and I/O loan with an offset account. I have an offset on both of my loans which doesn't cost any extra. I have my credit card set up with an autopay and live of this. This way the 30 days interest free you have on your credit card , you are saving (roughly 7% depending) with your money staying put in your offset and hence coming off your principle. NOTE: you need to have a buffer amount in your account to cover the CC repayments.
If you ever want to buy a PPOR you can use your money in these offsets, taking full advantage of the tax benefits.
Buy the first IP, give it 6 months until it settles down, you get tenants and you get used to your expenses, then look at purchasing another. You definitely don't want your IP's to be too negative and after reading steves book, have to come to agree with.
If you plan on getting a solid portfolio running, I suggest reading Steve McKnight's book 0-130 properties in 3.5 years. I rushed in to my first two IP's and really wish I had read this book before hand. It really got me thinking along the right track and now have a much better understanding of the property game!
I also agree with Jamie, get a mortgage broker at least for your first one, and they will set you up properly.
Sorry I can't recommend anyone good for you as I am also still looking!!
Good luck
DaveMc
If you're looking at 2 properties before Jan 2013, with your savings you will need to go 90% lends on both to cover deposits & stamp duty costs, etc. LMI will be applied but can be capitalised and is tax deductible.
IO on both with offset on one, excess cash to go into offset. Has the same effect as paying principal off the loan, however allows you flexibility. When time comes for new investment property, you can use excess funds to pay off part of one loan, and then taking out a sub account you can use the equity that was paid down by excess funds for the deposit and costs on new IP making it all deductible debt.
Hey Pat,
I was just wondering if you have found any good areas in Perth to invest yet? I am also interested in investing in Perth and a Newbie at this. So i was wondering if you could give me a few good tips on areas to invest in Perth that will have a good turn around. ($200-$400 G max)
Pat Mc wrote:My long term goal is to stop working FIFO in 3-5 years and be a full time property investor .Hi Pat,
This is the key statement for you.
How to do you propose to achieve this? Are you looking at a passive income stream or are you looking for a capital growth and sell down strategy?
The answer to this question then determines where & how you invest.
Hi, I use Dale Norman from BDR Business Accountants based in Mandurah
T: +61 8 95351566
Email: [email protected]
I've used Dale for my tax returns for around 8 years and he has assisted me with CGT on sale of properties and depreciation queries and the set up of a short term accommodation unit.. Dale has been able to answer all of my queries over 6 IP's in that time and we communicate via email, including sending my spreadsheets at tax time.
I'd like to find a financial advisor who specialises in property and Defence Super in the Rockingham area. One who won't try and sell me a product,
Good luck, regards Lisa
Hi Pat,
Have u bought anywhere yet? Last year I was just about to buy an investment in Tuart hill units for $240k rented at $330 after basic reno (painting/ floorcoverings ect) I like Tuart hill you can get units in nice complexes and close commuting to city 30mins by bus.
But then our situation changed, my partner and I were currently renting and our rent went up by an extra $55 per week plus I was pregnant. I've always said investing and renting was the way to go, but I think it was the hormones (lol) plus the effort required to find another rental property in Perth is a nightmare (plus we had a dog).
So we bought in Craigie $400k 3×1, it's a fairly average suburb with a lot of older 80s homes. But the pro's is its surrounded by higher priced suburbs, 5 mins to Hillary's beach. Plus an added bonus t's on the Joondalup draft scheme to be re-zoned from R20 to R25-R-30 (basically build another townhouse at the rear) although this could take a couple of years yet to actually go through. There's also a new subdivision of land going ahead where the old school was, I think about 95 new lots being created by memory. But I have a feeling developers won't commit to this until the draft scheme has gone through. The investors have caught on because as soon as a house comes on the market here it's usually sold within that week. We bought our house prior to an open viewing. Hope my 2 cents helped, Good Luck.
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