Forum Replies Created
Correct me if I am wrong, but I do not think you can negatively gear a property that you sometimes use for your own holidays – there are laws (such as CGT as well) that complicate this kind of investment.
Elmina
Dear Wishful
The earlier you get into the market, the better – and this seems like a great opportunity… but you know what they say about doing business with relatives! You must make sure everything is legally done, and all on paper as if you were perfect strangers to each other.
The beauty is you do not have to pay agents! Get a good settlement agent or conveyancer to do all the paperwork. The way to finance this is through a lender – I would go to a bank or BS. They will need to be satisfied that your salaries will be able to service both your current loan and your new investment loan. The rent you get is taken into consideration, as well as the current values of all the properties you have, and your lifestyle (which means credit cards, personal loans, car loans, etc)
If you can service the loans, you have a good deal. Try to persuade your in-laws that their rent will have to rise if there are future rate rises from the bank.
You will find the first two years the most difficult to manage – after that, your pay increases, the rent increases and a general rise in confidence will make you glad to made the move.
Hope this helps.
Elmina
markleslie wrote:Does anybody think that we are in a current situation where it would be best to hold out and pay off current properties and save money rather than purchase another IP? With talk of further interest rises coming and the current state of the economy creating a buyers market in the short term, do you think it wise to consolidate finances rather than purchase furter property?I currently have one IP with a debt of 107K, and it is worth about 220K. I have savings of 40K I could use to reduce the debt, or use on a deposit for further property. I earn 100K plus and with wife combined of 150K plus. Should I pay off current debt and save and wait, or buy?? I am having trouble deciding my options!
thanks
Mark.Mark – what I am trying to do is trade up! Although the market is not exactly hot, I am putting my apartment in Bayswater WA on the market, and I have had my offer on a small house on a large block accepted. Of course, a condition of sale is that I sell the flat. If I get no nibbles, no bones broken, except for a few classified ads and some signs.
I am selling myself, and the person selling me the block is selling himself, so we would save heaps if this goes through. (He is selling to develop one of his sites).
This way, I put my equity towards a property that will grow a bit faster (although the flat made me a ton of money in the 2 years I've had it!) without incurring a whole new loan. Of course I have had to reckon on paying CGT and all that, but the figures work. Getting another property outright did not. The bank is happy this way, and so would we be if we sold.
I have advertised on all available online places for property – do you know if this is an appropriate place to put details up?
Good luck
Elmina
