I wouldn’t say it’s necessarily GOOD or BAD. It comes down to the risk profile.

If a fixed rate was 0.01% more expensive than the variable offering, but gave a single income family with a tight budget piece of mind, is that not a GOOD result?

Horses for courses – don’t try gamble to beat rates by choosing fixed rates, choose them when you want a…[Read more]

The portfolio loan is subpar in comparison to a properly structured setup imho – be careful to make sure you’re not cross-coll’d even if they’ve said you aren’t. Many a time I find clients who had previous branch/other brokers loans who were adamant that they weren’t crossed, only to find out otherwise!

You’re paying a premium rate for the…[Read more]

I very much doubt you are near your borrowing capacity. I’ve assisted in financing clients into multi-mil portfolios on similar income figures (and they have PPOR debts which eat much quicker into your borrowing capacity).

Have a chat with a savvy investment based finance broker if you haven’t already, as your borrowing capacity issues may not be…[Read more]

If you’re relying on agents to find you deals, you’re not going to get the best margin as they know they have a HOT commodity.

Search yourself, buy privately, use subscription services to help you along the way (pricefinder etc).

Give a savvy broker a call/email regarding this than going direct to branch – it will save you a lot of time and hassles as we know the exact policies of multiple lenders, than having to guess your way around. I have done guarantors in the past with regional vacant land previous without issue.

Already cheap funding getting cheaper – we’ve negotiating heavy discounting across the board for months from the lenders, so no doubt we will see the majority of lenders passing on the full amount. Some smaller lenders have already done so.

The total income and liabilities are pooled together, to provide a net surplus income. Newstart for the most part is no longer accepted by lenders, and child support only if the child is <13yr’s old.

Ontop of that the Lender then will need to see a minimum living cost per month for the adult (circa $1100 per month – dependent on lender + each…[Read more]

As DT has said, unless she can show an income to cover the lenders calculations for supporting her own living costs + the investment, she won’t be able to borrow any funds. In reality this will mean having a job of some sort.

A job *itself* isn’t a requirement for lending, just the income – I write plenty of loans for clients who are self funded retirees.

You are required to state any loans which you are providing a guarantor to still, as well as only factor in 50% of rent. This structure doesn’t resolve the serviceability issue.

Other than that, quite a common setup you’ve mentioned for these scenarios.

And it is dependent on lender. Some lenders will only allow 2 at 70%, whilst others can do a 4 pack at 90%. Finance certainly is a strong consideration if you are reliant upon it to meet your development strategy.

Commercial certainly does have a lot more rewards, for greater risk. Due dilligence is paramount with your purchases, as a poor purchase can result in vacancies for *years* and a declining capital value.

The size of your inheritence will play a major role in your strategy, as if it’s significant enough you can get into price ranges where the…[Read more]

It seems I’m forming a bit of a reputation.

I do own several investment properties in some of the area’s you’ve mentioned, so I can comment on it a little.

The Elizabeth’s/Smithfield/Davoren Park do still present strong yields, which can be upwards of 9% if you buy well for standalone houses, and 9-11% for semi detached houses. Vast swathes of…[Read more]

I’d think this wouldn’t be a second mortgage guarantee situation, but an equity access followed up with purchase finance with NAB secured solely to the new purchase. This is standard fare and nothing to be concerned about.

Most clients who I’ve seen do well in mid-outer Syd purchased heavily in 2012-2013. They have usually hit gains of 25-30%. Many are drawing from these funds to now buy in other markets, whilst others have used this as a chance to sell out of a market they they believe has peaked (as you’ve alluded to).

Inner Sydney is still definitely presenting…[Read more]

Great post JZ.

Another great thing to remember is that CG and CF properties not mutually exclusive. Some CG properties have strong cash flow, and likewise some negatively geared properties have terrible growth!

The key in the end is to buy a property with long term desirability. This will drive your growth in both rental and capital gains.…[Read more]

If you are intending to convert the PPOR into an IP in the future the benefit is less great, but you will still have increased deductions in the meantime. The offset funds will either be injected into PPOR (future IP) or used for the IP deposit – in either case the funds are not being used for the next PPOR purchase which is the true benefit of…[Read more]

Who ever is providing you with that advice has no idea what they’re talking about.

1. don’t use the offset account funds if its against your PPOR. Pay the offset funds into your PPOR loan, reducing your non deductible debt.

2. THEN have a separate equity access loan setup to provide the deposits for the two investment properties. This will…[Read more]

This can certainly play into lender policy, but I’ve yet to ever have a deal we couldn’t put through due to rent reliance – it’s just a part of correctly structuring lending, factoring in lender policy.

This is including clients with large multiples greater rental income than wage/business income.

Downtime issues would be a major headache. You are ensuring the delivery of a service, without it you’ll get constant calls about downtime/latency issues/intermittent speeds and everything else under the sun.

Definitely forced savings. Same goes for paying down your principal place of residence or an investment property.

Efficiency wise however, paying down non deductible debt first is far more effective than investment.