Looking for peoples opinions on current buying situation:
Without going into great detail i am looking to build a new home to take advantage of the grants available in QLD. This will be my first property purchase and i only intend to live in it around 12 months then move out and rent it.
I have been doing small amounts of research for the last year and have chosen a new suburb that has just had a shopping centre built nearby has a primary & secondary school in the suburb and is surrounded by suburbs of newer homes around 5 years old.
My initial plan was to go for something in the low $300,000 mark: 3 bed 2 bath average size land (500m2 and under) in the past year of saving for my house and having some opportunities to do a lot of over time i have exceed my initial goal and now have nearly a third of the purchase price saved. Someone suggested to me that with the extra money i should be looking to purchase something a bit more expensive in the high 300's low 400's mark that would get me a 4 bed 2 bath with maybe some extra space.
I would have though that a 3 bed 2 bath with a small low maintenance yard would be more appealing to the rental market especially with young families?
I won't comment on the area or dwelling type but I strongly suggest that you set the loan up as interest only with an offset from the start if this is going to become an investment property in the future.
This article explains the concept.
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]
Think about your longer term strategy and then work backwards. That will tell you how much deposit to use, how much to spend and what the cashflow numbers will look.
Have you determined what the longer term strategy is?
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Hi JSSMM
Firstly welcome to the forum and i hope you enjoy your time with us.
Met up with a forum member in Brisbane yesterday in exactly the same boat.
We discussed several strategies but in essence i would be looking at what you intend to do when you move out and if is buy another PPOR i would be considering taking your loan to the maximum (certainly wouldn't be sticking all of my savings into the initial loan).
An interest only loan with 100% offset will minimise your interest expenses (especially important whilst you are living in the property) whilst at the same maximise your interest Tax deductions when you decide to move out.
You could even look to take the loan > 80% place your $15K FHOG in the offset account and accept the LMI cost,
Remember when you move out of the property the LMI will become a deductible cost and will be proportionally claimable over the remaining 4 years or the term of the loan whichever is the shorter.
Sometimes the structure and clever use of your money can be the difference in growing your portfolio quicker than normal.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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