Forum Replies Created
I gross around $55k as a 22 year old
Brought my first IP 12 months ago for $340,000
Reno for around $5000
Val is now $425,000
Now has $40,000 odd avail equity
Have saved $15,000 during that time
Rent is about NuetralNow I repeat
Mudassar Hussain wrote:Thank you for your reply, After the first property, then i am not first home owner, so i wont get the grant, and i have to pay the stamp duty. so how do i manage the second deposit, and third or forth. Let say, i want 5 properties in a year, to follow Steve's formula. my first property hasn't grown enough equity to use, and i don't have enough money saved up . So how to raise money for the deposit?I dont think you have the knowledge or experience to start out with 5 properties a year. You can do a reno to increase equity, or you have to buy under market value.
I brouhgt my 1st IP about 10 months ago for under market value. The bank valuation came in $45,000 higher then the purchase price. It has now gone from a purchase price of $340,000 to $427,000 in the space of 10 months allowing me to start looking for IP # 2. It gives me about $40,000 of accessible equity to use as a deposit on my next purchase
714
Hopefully an infinite amount in the next 13 years…goal of retiring at 35!
WOW. I suggest you do some reading
Do you have any idea how much you can borrow? If not why would you start looking?Hrrmmmm I think its probably better to wait and save up at least the Stamp Duty and LMI then
hey abhargav,
There is a 3 day leniency in WA.I was late by 3 days on my settlement 5 months ago but as it was in the 3 day "leniancy" period there was no panalty. The agent and vendor were very understanding and had no problems with the 3 day delay in settlement
propertunity wrote:howardcm wrote:Doesnt that mean though that you will never own the house? …. and if you keep getting IO loans then youll be doing a full circle of never owning a home outright but always paying the difference between rent and your IO mortgage? Sorry, 21 years old and very inexpiriencedPlease tell me how, even using your best efforts paying off loan principal you can come anywhere near the equity that GC of the IP is doing. They probably exist, but I've never met anybody who has saved $2.82 Million in 30 years.
Paying P & I you get the CG equity as well as the Equity you are getting from paying off the Principle part of the loan.
I just really dont see the point, especially when it's CF+ paying P&I
IMO there wont be a lot of capital growth over the next few years so I may as well be putting my money into the loan creating enough equity for another purchase of a CF + property. This way the IP's will be paying themselves off creating equity while I wait for CG to eventually come.
If the only properties I am buying at the moment are CF+ paying P & I, doesnt it make more sense to have them actually paying themselves off creating a little equity to fund more IP's rather then putting the extra money in a low interest saver saving a cash deposit for more IP's?
maree_bradross wrote:Someone much wiser than me will be able to explain why you should structure your loan interest only. But my understanding of it is you can claim the bank interest on your claim. You would be better off putting the money you would be paying off the principle into a separate account (line of credit) to use for future property development, purchases.If your targetting students you may be better off renting the rooms individually?
Doesnt that mean though that you will never own the house? Whats the point of that if your rent doesnt cover your mortgage? Your losing money and not gaining anything in the long run except equity (money from the offsest account) to purchase other properties, and if you keep getting IO loans then youll be doing a full circle of never owning a home outright but always paying the difference between rent and your IO mortgage?
Sorry, 21 years old and very inexpirienced
I'd like to rent it out wqithout a property manager so renting the rooms individually would be a lot harder. Might give it a go and put up a few flyers at the uni though
maree_bradross wrote:If you can get $400 per week as is – maybe go for this option as it is almost covering your repayments (are they interest only?). – when coupled with a depreciation schedule and other claimable items such as bank fees, visits etc it will cover the shortfall.When your between tenants I would do the upgrades – this way you can claim it all.
Just my musings – someone with more experience may have a different way of thinking
Thanks for your reply!
No, repayments are Principle and Interest as I would like to pay as much as I can off the home loan while I am living with my gf. I am extremely confident of getting at least $400 a week and vaccancy is extremely low. 15 min train ride to perth CBD, 5 min walk to the beach, 5 min drive to University.
My target tennant would probably be uni students or people working in town who enjoy the beach. Another reason why im not sure about renovating as it wouldnt make a huge difference with a uni student but could with a city worker
No takers?
miike wrote:Sure, you can paint over it, remember however, that all marks will be visible…do at least 3 coats if using water based.Even sanding to smooth it out will help!
Cheers,
MiikeThanks for the quick reply!
I think the smooth look would probably look better though, what do you think? It's a 1960/70's 2 bed 2 storey town house, with just the kitchen, lounge, 2 beds, bath and small hallway area upstairs. The house will become a rental in the next 3 to 6 months
I guess seeing as the paint I will be using is free it wont hurt to test it out and see how it looks!
miike wrote:Hi howardcm,I had a similar dilemma a few months back and decided that i needed to plaster it.
Depending on the size of the walls and amount of rooms this can be quite costly if using a tradesman…it can be done yourself although getting this right can be like climbing mount Everest without experience.Another solution which I used behind my splashbacks for my kitchen is to use boarding.
i.e. 3mm plasterboard.Good luck.
Miike
Thanks for that Mike,
I'd be more then happy doing it myself, the paint I am using will be free as it will be left overs from my gf's parents house they are currently doing up.
There will be a family room with 3, 4 x 2m walls and a partial wall with stair case built in. 2 bedrooms with 4 walls about 3 x 2m and also a small hallway 2 walls 4 x 2m and 1x 2m. Quite a lot of work to do so would prefer to not go down the path of using plaster board.
I wonder how it would look if I just painted over it leaving the rough look?
Any other suggestions?
No one willing to spare a few thoughts?
unwired wrote:hican anyone give me some advice
where and how can i find the positive cash flow properties
please!Ground floor 1 bed apartment in Vic Park, Perth. Deceased Estate, Council Sale. 5 mins to CBD, 5 min walk to cafe strip, 5 mins to Curtain Uni, 10 min walk to Vic Park Shopping Centre, 5 min walk to train line, plenty of redevlopment including the introduction of the free "CBD Cat Service" (free busses) running from Vic Park to the CBD in 12 months time
Price – From $165,000
Rented until Sep 2009 for $285 week
Strata fees $175 a qtrPlent of room for Renos to increase weekly rent. Original kitchen, bath, flooring and small outdoor patio. Not the most attractive complex but a nice street.
If I hadnt brought a house 3 months ago I would be snapping this up
-1157 haha hrmmm a long way to go!
I have just brought my first home. Moved in about 6 weeks ago.
I had trouble at first as well with where I wanted to buy and found myself checking 50 suburbs every day. I started around Vic Park and Rivervale, looking for a Villa. I had always dreamt of living near the beach so then moved further South towards Secret Harbour looking at 3×2 houses. I had planned on having a friend or 2 moving in with me so had to consider if they would move so far South and decided against it.
As this property will become an investment down the track, I started looking at where I would want to live if I went to Uni. I ended up finding a really nice 2 bed townhouse in Mosman Park for $340k, 500m to the beach, 2 mins to the train and a short distance to UWA. The place has plenty of potential as it needs a bit of improvement but perfectally liveable as it is.
You sound young so think about if you really need that bigger house or if you would prefer to live near friends/family, the city and in a better location as I went for. Very happy with my decision
Ahh yes I forgot about the Vics not getting the stamp duty relief
Doesnt really matter where the property is, if you find a buyer desperate to sell and offer a fast settlement you never know what can happen.
I had a look at the previous sales history for the complex im in and 1 townhouse (same size building, slightly bigger courtyard but backing on to major highway) sold for $429 000 a month before I put my offer in (still hadnt settled). My place was on the market for $439 000 and eventually came down to $389 000 and thats where I offered $340k, they asked $350 000 but I didnt budge (couldnt budge even if I wanted to and I probable would have)
Only 15k's from perth CBD, 400m to the beach, 200m to train station and in a surburb with a median house price of well over $1million and an extremely high growth area
I thought because it was your first house you wouldnt be paying any stamp duty? In fact im certain as I brought a house 2 weeks ago
I was in a similar positon a few weeks ago when I purchased my first property. Because of the LMI that I was going to have to pay as I only had a 15% deposit I would have been unable to borrow enough. The bank offered to do a market valuation. I told the bank I thought I had got a great deal as the seller was about to go bankcrupt so they were happy to do 1, although went out of there way to say 99% of the time the bank will just value it at what you have offered.
I had paid $340 000 and the bank ended up valuing the house at $385 000
So seeing as I borrowed less then 80% of the $385 000 I didt have to pay LMIIf you have yourself a great deal maybe try and get the bank to do a market valuation. If you loan less then 80% of the "market value" then you wont have to pay LMI
I think thats how it all works anyway, correct me if im wrong
I just brought my first place about a 5 min walk from the train station in Perth
Excellent for getting to work and the only noise I hear is the horn when a train is coming to the crossing
I'm lucky that even though the train walkway is only 15 mins from Perth CBD trains only come past every 15 mins in Peak hour and only once every so often at nightI usually hear the horn once before I fall asleep and dont here it at all when watching TV or doing whatever else
