Hi Dellas,

Given this is your first property and you have no other security you will need a cash deposit.

Reading your post above it would appear as if  the bank is lending at 80% – did you enquire about borrowing at a higher loan to value ratio?

In this scenario you are using $93K of your savings and retain $54K

If, for example, you borrowed…[Read more]

Hi YU,

No worries – tis good you are still digging.

As your plans include a new home in 5 years time (a relatively short time frame in the property world) your plans should address how you intend going about that purchase.

Often people upgrade their homes and end up with a relatively large mortgage on their new home and a proportionally small…[Read more]

Hi Ceekay,

Did your contract include conditions addressing & seekign to remove the caveat from title before settlement?

Hi Dellas,

On the proviso you are disciplined with your money I would put minimum cash into the loan and put the remaining funds into an offset account.. This maximise your flexibility going forward and gives you a cash buffer should the wheels fall off your life at some stage in the future.

Should you or your partner need to move for employment…[Read more]

Of all of your debts only the portion that relates to the original property will be deductible.

Edit unless the car and boat were business deductions

Hi YU,

Your current level of equity could well mean you will need to pay down some of your debt so you are in a position to release some funds for your next purchase. I guess the key is to make this pay down amount as small as you possibly can so that you retain as much cash as possible which can be redirected towards your new home in 5 years…[Read more]

Hi Ryan,

You see a lot of poorly written articles in the media – that would have to rank with the best of them.

I suspect the article was stimulated by the recent release of the 100 Richest People in WA. I understand other states did a similar thing too.

Sure property rated a mention with many of the people who made the list. The bottom line…[Read more]

TheYoungUnprofessionals wrote:

Q: Would it be better to keep our current mortgage as P&I, overpay $170k immediately then redraw some of that equity, or should we convert to I/O immediately, open an offset account and deposit the $170k, then use that account to fund the IP purchase?

If you are moving out into a new PPOR in 5 years time you…[Read more]

Hi Dan,

Not a broker so take what I say with a grain of salt.

Make sure the broker you choose is also a property investor. I would steer clear of those franchised operations where you will in, all likelihood, be serviced by an employee.

Your spending ceiling makes sense too – takes advantage of FHB grant. When speaking with your broker make…[Read more]

Hi Dan,

My bad – just noticed a typo in my original post. Sorry.

I meant to ask how much 'cash' you have saved. This is important to your overall borrowing capacity.

I am sure you are aware the WA Govt still offers a $7K FHOG and First Home Buyers in WA are exempt from stamp duty for any property up to the value of $500K. These two incentives…[Read more]

Hi Dan,

You don't say what sort of interest you have saved at the moment. 

With finance size does matter. The bank will not only assess your income level they will also look at your security level, In the instance of your first property this often, not always, is your savings level.

I assume your comment, "I have it too late to purchase a…[Read more]

Who baulks at paying to get their car serviced? As a car owner I know I need to make arrangements to look after my car. I also know the car will require maintenance over the life of ownership.

Just a car needs regular service to to does a property. Owning a property comes with responsibilities and as landlords we should be fulfilling…[Read more]

nice sig TonyLyn

Sounds like an investors has tried to make the best of an average property and stuffed two 'units' into one house and the one you are looking at gets short changed without a laundry or parking.

A 2 bedder without even a single car space. Not a good idea.

Maybe you could target the 16 old years working night shift at Maccas, who don't own a car…[Read more]

Never too late – just depends on the strategy you employ.

For what it is worth simply buying and waiting at the moment will be a slow journey. If you continue to buy the type of property that you have been then you will no longer be able to service new loans and you'll be hamstrung waiting for the general market to improve.

In the current market…[Read more]

Hi LB,

There are a number of companies that provide depreciation reports. Deppro, Washington Brown, Depreciator, BMT are some of the bigger companies. Give them a call and get quotes etc.

The depreciation report is prepared by a quantity surveyor and will have a 40 year (from date of build) life span in most cases. When speaking to the quantity…[Read more]

Hi Lb,

Loan structure if fine for the conversion from PPOR to IP.

As far as tax goes – all you need to is keep a record of your expenses and income relating to the property. At the end of the year you include your rental income in your income declaration and can claim your expenses as a deduction.

Suggest you grab a copy of the ATOs Rental…[Read more]

Hi FF,

That is exactly what I meant – means people can frame their responses on the basis of you are planning to work for another 16 years. We now have a specific target to work towards.

When I last looked at some REIA stats median property prices in capital cities tended to double (on average) every 10 years. This is not a straight line growth…[Read more]

Hi FF,

There is a critical piece of information missing in all of your posts.

You have told us you are 39 and then proceeded to ask a question to see if you were 'told old' – you haven't told us what age you want to be independent/retire. What age is in your plans?

This information may put an entirely different slant on things.

Property is…[Read more]

PaulDobson wrote:
the one that always comes back to bite us the most is rushing the choice

Wise words there Paul.

The issue of rushing doesn't only apply to choosing VF buyers.