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Also you mention you have property, maybe drawing equity from them is cheaper in the long run,
Higher LVR's, Line of credit etc…..(proving income now for loans while you don't own the station now could be an idea assuming you have a stable income stream now?) then the money is yours to go ahead with your venture?Yes depending on the location the banks generally view this as medium to high risk,
hense the rubbish LVR. Remember to have a well documented business plan (even written out by your accountant preferably)
when you approach the bank. If you have other past businesses that have kicked goals this will weigh up for you also(add these in).
Approach the bank as professionally as possible with a stack of evidence why they should lend to you(and ask for the highest lvr you think is possible).These cases(im fairly sure) go straight to the banks credit managers so a human has a big deciding factor, not like a standard
home loan which is all computer generated lvrs etc…..Yes
Even if your shifting your money around in the mean time, keep st goerge account open just for bookkeeping etc, they do have good introductory/honeymoon interest rates at the moment that are fairly competitive.(they also revert to a lower rate than standard variable at end of term too)
Congrats on deciding to go a head with an IP.
With the market showing a few green shoots its a opportune time.
Good Luck!!
Yes great post Terry.
Keeping your own cash out of the deal is always the best option. Using the banks funding(which depreciates with inflation!!)
is always preferred.There are many factors like Richard said that come into play with the budgeting and No 1 importance is the buffer!!
Yes agree also, IO is great. Especially for investment property later on after the FHOG obligations etc
Maybe worth looking at pre-locking in a fixed interest rate unless you have the capacity for the interest rates to
rise by maybe 2-4%(purely speculation however they are only heading one way…..)Crosby Above is spam for sure, i have reported abuse…..
Hi Cass,
If you pay a deposit more than 5% this sometimes qualifies for the genuine savings(or does not require the bank to prove savings)….
So if you were borrowing money(from personal loan, family etc) for settlement and paying it back with the FHOG and stamp duty concessions(on settlement or shortly after) it could be a way of getting over the line. I will freely admit saving up for a deposit is hard work!
Lots of clients have used this strategy. Works well.
Firstly congratulations on even thinking about buying an IP!!
Secondly 99.99% of the time- NEVER sell!(there are time whens its applicable though)
it just cost too much, capital gains, mortgage break fees, agent fees…….(long list)Equity release is usually the best way however everyone's situation is different.
based on what you have estimated you have a loan to value ratio(LVR) of only 65%=
(360 divided by 550)Income and expenses dependent you could increase this up to around 90-95%
495-522.5k minus current loan leaves about 135k to play with.This is enough to buy many IP's and leave some for servicing until rents increases and value adding
pay more of loan repayments…If you have a lending quote done make sure you use a broker(not a bank) who specialize in investment loans
and have property investing knowledge.This is a great place to learn lots from some really well educated people who are active investors!
Wow, that is new.
The inspector is pretty crafty! You could somehow politely ask the purchasers if they think they are getting
a cost efficient service for their money. I thought you payed the inspectors for the assurance of pest etc. He is essentially palming off the responsibility(come a court battle)?? I would be interested to hear what your solicitor says???Yes very good posts above!
Another thing to be aware of is the factor of stamp duty.
I rung the stamps office for clarification however im not 100% certain, you need to move in in the first 12 months(not 100%) sure, and unfortunately live in the property for the full 12 months to receive the full stamp duty concession.Its hard to clarify however needs to be looked into if you plan to move in to get FOHG then rent it out asap….
Hi
1) You usualy have a limit on how much principle you can pay off anually with an interest only loan, however it depends on whether
you are renting it out or living in it which makes it viable or not. Having offsett account means more liquidity, much prefered however different for every one.2)In my short experience the LMI is higher if you can not provide a savings history as it becomes an unsecured deposit so if you have three months of savings records great!
I agree try to maximise the FHOG however im trying to find out at the moment FHOG means living in for sixmonths, the stamp duty concession means living in for 12 months……still researching… renovation while living in is like taking two stabs at the pie so definantly try to buy some thing at a discount to implement this good strategy. exactly what im try to do now….
Good Luck
MattI have spent considerable time investigating the chan naylor property trust with the tax department, scams dept ect etc.
A FAIRLY big accountant warned that the tax dept were out to shut down the chan naylor trusts as they were breaching a few
"rules"
After many calls emails ect(to the ato asic scams ect)a they pretty much came back and said it looked ok. It hasnt been flagged as a dodgy scam or the like
and if i really was worried a private ruling would need to be served. I know personally a few people who haved purchased the trust so i was going to do a bit of homework before i did. The 3k price is becuase they have trademarked the Hybrid/discretionary advantaged mixed in. Somewhat over priced if you were using it for negitivly geared the advantages are there. especially if you wanted to transfer assets later on!(children etc.)I will be a bit nervous spending 3k on a sort of A$500 document however it will be worth it in a few years.
The saying short term pain-long time pleasure…..Info previous to this is very informative..
Matt
If you can get a line of credit(not sure what your gearing is now?) going into the next IP(in the best location you can afford)
would be the best option in my opinion, just try not to cross collateralize the next IP with your existing( by means or credit line paying cash not using current equity different banks trusts etc…)
The inner suburbs are now showing neutral and the odd positively geared IP with the best opportunities for someone like your self that might be able to pay cash…..Best suburbs are the go, they hold or even still increase in a downturn….
Hope this was of some help.
Matt
