Hi Jo,
Re your comment “Should I wait until I have 80% LVR so I don’t have to pay LMI?” I’d like to add a few thoughts:-

1. Many investors agree that the paying of LMI can make sense in the generation of wealth – but it may not be the best decision for everyone, so do have an adviser take a look at your situation and discuss things in full.

2. I’ve heard that LMI payments seem to take a huge jump once past 88%, so if you were able to stay at 88% max (borrowing $75k instead of $88k) would this be sufficient for you to invest? It could help you a bit by keeping it lower…. one to discuss.

3. The other side of borrowing at a high LVR is your DSR. If you earn a good income, this may not be a problem for you.

4. Is such a purchase in step with your goals?

Other things include setting up your loans and mortgage accounts in the right way to maximise your benefits (e.g. offset account, keeping certain accounts ONLY for investments, etc). Your adviser should be on top of this and guide you.

Good on you for taking a look at IP’s. Do keep us up with what is happening – we are only too happy to help,

Benny

• This reply was modified 9 years, 6 months ago by  Benny.

Hi PaulKaren,

Out of interest, I just Googled “Property Clock Gold Coast” and saw quite a few useful entries pop up. The concensus seems to be that 2015 is likely to look good for the GC.

I watched as values rose, then fell again from 2008. I am still holding one in the area that I plan to sell next year. Or even this year, if values return to “good numbers” before 2016.

Benny

PS I especially enjoyed THIS one – it talked to the veracity of the clock itself, and had a few warnings, along with some really common-sense info :-
http://www.apimagazine.com.au/blog/2014/01/hidden-media-cycle-winds-the-property-clock/

Hi Jason,
I took your post out of the other thread, just so any replies to you don’t get confused with replies to “jcross”. I’ve got a few thoughts for you, but first I wanted to let you know what just happened !! I’ll be back !!

If you have an idea for a better title, let me know in a reply and I will adjust it.

Benny

Hi JC,
A good reply there from CRJ – but lets visit their warning :-
“Bear in mind the high costs of entry and exit probably about 10%”

Going by your words, I “think” the property you are talking of selling is your own PPOR – is that right? If so, then one of the common costs (CGT) of selling has gone away. But yes, there are still several other costs to consider when buying/selling.

My income is relatively low (60k) so the temptation is there to sell up in the next 6-12 months or alternatively purchase my first IP.

Another option would be (subject to serviceability) to borrow against the Equity to provide a deposit for IP#1. Do talk with one of the Finance Advisers re your possibilities (you may be surprised at how many options you might already have). Of course, any final decision should be taking you closer to your goals, not further away.

Re Gold Coast, I have the impression that GC prices (like Brisbane’s) have been suppressed for some years. With Brisbane now moving, it is likely the GC will be moving already, or might be ready to start moving. We had our dip following GFC – now, 6 years later, I’d think a gentle increase is on the cards. But note, I don’t “follow” the Gold Coast in any depth – so that’s really just another opinion…..

If I use the strategy of selling soon and then looking to buy again when/if prices fall, due to the market cycle, am I losing valuable time in the market.

I was just reading one of Jason’s recent Articles – and one of the points made therein was on that very subject !! Go here to take a look:-
https://www.propertyinvesting.com/the-7-most-fatal-property-investing-mistakes/ Now scroll to subject “#5 – Buying at the Wrong Time”. Have a think around that, as it also has a bearing on “Selling at the wrong time”.

In short, know WHY you are wanting to sell before actually selling. Know just how the figures will work, the advantages selling will provide you, and the disadvantages too – BEFORE you sell. Having a chat with one of our members who is an adviser on money matters would be a good idea too. Use the knowledge of someone else who knows things you need to know – and maybe make them part of your “team”.

Benny

Hi Loukediva,

When I tried to calculate this all I could see was that there was a -$42,000 difference between our current annual expenses and how much we would have available for ‘guilt free’ living.

It would help if you shared the data you were using (even if not “actual” figures – e.g. you might not wish to share your actual income on a free-for-all website) but at least show us WHAT data you used.

Like this – If your ACTUAL Income is $152k per Annum, and your expenses are $110k, you might retype them as $82k Income and $40k Expenses (a $42k difference). See, we DON’T need to know the actual numbers in use, but more WHAT data you are using (what is being subtracted from waht, etc).

I quite appreciate I have probably picked the WRONG data as I haven’t taken 70% of anything yet – but you tell us which is the data you are using so we can help,

Benny

Hi Coogee,
Probably more important than “which suburb?” is your answer to “What kind of purchase leads me toward my goals?” e.g. Are you wanting to build positive cashflow, or are you looking for a different outcome?

“Set and forget” by buying in a +ve cashflow area (like Woodridge or many other outer burbs)
“Reno and bump rent” to bring your purchase near cash neutral, with a more likely equity growth advantage. (Any suburb)
“Go for Equity” and don’t worry if negative geared (your other IP’s might be funding an Equity “giant”?). Inner suburbs better?

But first, let us know what your situation needs at this time.

Benny

Hi Ben,
Good name BTW – :p You have a few questions (or doubts?) re Pimpama, perhaps with good reason…..

Here’s a link to an earlier similar question.
https://www.propertyinvesting.com/topic/5004119-coomera-queensland-a-good-area-to-buy/

Take a look – it has several replies already – maybe you can add your findings to that post to help others?

Benny

Hi Jeh,
As a new member, welcome aboard – you have come to a good place !! And good on you for asking the questions you need to.

It is always good to know how to EXIT an investment before getting into it – hence, useful advice from Catalyst.

Re Pimpama, I don’t know that there is a lot there – are there plans for schools, shops, etc? Or, is it mainly being considered for “tourist rentals”, with its easy access to Dreamworld, Movie World, etc.

What I do know is that there is PLENTY of land there, so scarcity is unlikely to be a problem for some time to come. Do you have documents re expected prices, rentals, land sizes, facilities, etc?

Put it up here and let’s see what it shows eh?

Benny

Hi Brunowa,
I bet you are delighted that you asked on forum eh? There are so many of these little traps that “the average Joe” leaves to their professionals. If accountants got it wrong, how would you have known? I’m glad you thought to get a second opinion.

As you said, it didn’t sound right, and could have cost you dearly. But now it won’t – and you should reach around and pat yourself on the back for “double-checking”, rather than just accepting that “my accountant knows best”.

Well done champ, :)
Benny

Hi Calderan,
Welcome aboard – and please don’t worry about any “dumb questions” – ‘cos the only dumb ones are the ones you DON’T ask (and we never get to know about them…. :p )

I’d like to share a couple of pointers with you – you sound like you are as keen as mustard, so I’d suggest you take some time to read heaps – good books, this forum, some links especially (see below), and really start to get to know HOW it all works before choosing which way that you would make it work. You see, there really are many ways to “make it” with Real Estate.

Currently, Steve has a free book offer (pay P&H only) that is a well-written look at “How he would do it again today, knowing what he knows now, but starting from scratch”. I found it a very worthwhile read.
Go here to get your copy – https://www.propertyinvesting.com/store/0-financial-freedom/

Also, take a look here – it is a thread I am working on that contains several answers to new members’ questions, including a couple of stories of “How people can make it in Real Estate Investing”. https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/

Other than that, check out future posts for “meetups” where investors get together all around the country – endeavour to get to one or two of those, just to meet up with like-minded people. There is usually one a month in several of the major centres.

As Kinnon says, we don’t (usually) race to pay off good debt. It is too advantageous to keep it in force. Now bad debt (credit cards, car loans, etc) – that is another story altogether. THAT is the debt to get rid of.

Anyway, grasshopper ;) A lot there is to learn, but learn it you will. The ride you will enjoy !! :p

Benny