Hi all,
I have recently spent the last 3 years working in Karatha and have saved close to 200 k which I have been off setting against my Appartment that I bought for 225 k. I believe the Appartment would be valued at close to 250 k by now. So this leads me to my next question, what do with all this equity.. A question that I'm sure that is asked a fair amount here. I'm 28 years old and looking at settling down on the sunshine coast and buying a place there in the next few years. Just wondering if I could get a few different perspectives from fellow investors here on some smart strategies to knock up a plan of attack for the next 5-10 years.
Your help is greatly appreciated.
What do you want to achieve?
You really need to set a goal and devise a strategy from that.
Get a decent broker/banker, accountant and buyers agent on side (if buying interstate) and avoid using your cash to fund the purchases – look to borrow the money instead and leverage the banks money rather than your own.
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]
Hi diluca
Jamie Moore, who responded to you above, is a very well respected broker on these forums. You have a great opportunity to leapfrog your financial position. If you have the right people on your team the results will be awesome. Get the wrong people and the results will be paltry. Why not give Jamie a buzz to discuss.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
It is important to maximize your returns. To do this it is import to educate yourself about the market so that you can do your own due diligence and you are not relying on the advise of a salesman or a so called investment advisor
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Congrats on starting to think ahead – having lived in northwest mining towns I have seen people burn their high income earnings on 'toys'. I have also seen people make good use of their high incomes while they are there. Looks like you fall into category 2.
Grab yourself a decent broker so any move you make from here minimises the amount of cash you put into the deal. Try and retain as much of your cash in an offset account so you retain flexibility moving forward from here.
I don't see much of a problem in you now grabbing yourself a property on the Sunshine Coast that will eventually become your home. Set it up interest only and maximise deductions in the first few years of ownership.
Given the Sunshine Coast market is flat you would be buying low – and the next few years may provide you with some growth to make your investment decision beneficial in the medium term.
If the property is to initially be an investment property and then a PPOR i would suggest a 100% loan using your cash funds as collateral security by way of Term Deposit.
This way you maximise the deductible interest whilst the property is an investment property yet when you want to move into the property you can release the Term Deposit, pay down the loan and set up a sub loan to use the equity for further investment.
Let me know if you need the recommendation of a good Qld Solicitor.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Richard,
Could you please elaborate on how the Term Deposit works against the loan?
Is it similar to an offset account, or am I way off the mark?
PS10 wrote:Hi Richard,Could you please elaborate on how the Term Deposit works against the loan?
Is it similar to an offset account, or am I way off the mark?
I'm also interested in how this works? Never knew this could be done.
Derek has outlined the process better than many Brokers i know.
Exactly as Derek has mentioned and although limited to an 80% lvr we have used this many a time for clients who want to eventually move into their new property.
Doesn't work like an offset account but you do maximise the interest deductions whilst the property is being rented out.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Oh my, you learn something new every day. Nice one boys! I like it!
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
diluca you are very lucky, you have responses from two awesome brokers now, Jamie and Richard
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Spoilt for choice!
Yes always a question of age or beauty.
My wife tells me that some people hundreds to get grey tinges in their hair and miine comes atirally.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Don't worry – I found my first grey hair the other day….then realised it was just a pug hair
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]
Heh Jamie lucky you.
Mine are all mine and paid for.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thank you Derek and Richard for explaining this further, much appreciated.
Not a broker & not Richard – can be done.
The bank needs security over their loans before they lend money. In some cases a bank will accept cash in a term deposit as security.
For example you want to borrow $80K but you want to retain the cash you have (a bit like OP situation).
Some banks will allow you to deposit money into a term deposit (out of your reach) as security for the borrowings – in the example I have given you would need to put $100K into a term deposit to borrow $80K at 80% LVR.
Good strategy when you are selling your home which also provides security for investment LOCs, Secure your LOCs by term deposit, retain cash and when you buy the new home transfer security from first PPOR to term deposit and then to new PPOR.
This is not a simple, straight forward process and you will need to work closely with your broker,
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