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hmmm, interesting,, but he still needs to come up with the deposit isnt it? thats ‘not his money’?
so what do you think i should do based on my figures? IO or P&I?
Basically i work on a job with quite low pay, and it takes a long time for me to save up a deposit. But i would like to buy more properties either WRAP, QUICK CASH (Recnovation) or POSITIVE CASHFLOW within 1 year.
How does one calculate the monthly repayment for a IO loan? I have a mortgage calculator but dont know how to use it for IO.
When i am using a IO loan, isnt it considered “wasted” as those interest paid over the years didnt reduce the loan at all? I know it gives us more cashflow on one hand, but we have to calculate the interest paid to the bank dont we?
Michael,
i will be loaning 74700. I can get the P&I loan for 6% for 30 yrs, (monthly repayment = $447.86).
<how do i know how much interest or principle i pay per year?>If i use a Interest Only loan, then it will be 6.11% at 30 years. ( i dont know how to calculate how much repayment is for IO loan).
Details:
Purchase Price : 83,000
Loan : 74,700
Rental: 120 p/w or 520 p/mUpfront:
Stamp Duty – purchase $1792
Stamp Duty – motgage $ 263
Registration of Transfer $292
Redistration of Mortgage $59
Loan application fee: $400
Motgage Insurance : $929also Derynaka,
why does a IO loan frees up more cashflow?
ALthough we dont pay principle on it, we still pay about the same amount dont we? And usually the interest loan is higher in % than PI loan.
give me an example based on my property figure pls.
THank youDerynaka,
hi thanks.
Well, the loan application only cost me $400, and there’s no valuation fee nor monthly fee for it. Also, the stamp duty was only about $1000+ from what my finance broker calculated for me.So you still think its better for me to get a Interest Only loan huh?
What about when i get positive rental income, is that taxable? How do i reduce that? By getting a paper loss is it?Try buying the “Australian property Investor” magazine which gives u the median price of all postcodes each issue.
Usually, if it is less than $150,000 your chances of getting a positive cash flow is pretty high.
For rents of $120pw, then the property should not exceed $80,000-$90,000.For $150,000 house, i would guess the rent should be more than approx $250p/w.
hope this helps!
