Hi Craig

What service is it that you're after exactly?

Cheers

Jamie

Hi Tabmo

I don't know of a good accountant in Ballarat but you've got James GG down the road in Melbourne from House of Wealth who will do a fantastic job http://houseofwealth.com.au/contact-us/

Cheers

Jamie

It's a tough one.

I speak with so many people that have set up complicated, expensive structures because they read in a book that it was the way to go when it didn't necessarily suit their individual circumstances.

Trusts certainly have their place – but I don't think they're for everyone.

Before forking out any cash you should really consult with a professional who's going to provide impartial advice that's specific to your situation. If in Sydney, Terryw is obviously the go to guy.

Cheers

Jamie

Hi David

Option one is no good.

Here's how we generally set it up.

Loan 1: Equity release against your PPOR to cover the deposit/costs on the IP. This is usually enough to cover a 20% deposit plus costs but can be a larger amount if you want to contribute a larger deposit to take advantage of a lower rate on the IP loan.

Loan 2: The remaining balance for the investment property loan (usually 80% of its value – but can be lower if you've taken out a larger equity release against your PPOR).

These loans are usually set up as interest only – with the first securing your PPOR and the second securing your IP.

Of course, this is a general structure that may or may not apply to your individual circumstances. 

Cheers

Jamie

No worries – and I've responded to your PM.

Cheers

Jamie

Every investment decision comes with an element of risk. 

I understand where you're coming from in terms of highly negatively geared properties impacting on future serviceability but the fact is, without some capital growth the portfolio is going nowhere. 

Cheap properties in the sub $100k mark are generally found in rural/remote locations with little chance of future growth. After you take into consideration holding costs – even a $100k property with a healthy yield isn't going to provide enough cashflow to let you retire.

You'd need to have dozens of these to even come close – and at that point, you've got dozens of tenants to keep happy which feels like a job in itself.

Cheers

Jamie

Hi again Mark.

If your property is worth $600k and you have a mortgage of $125k then you've got $355k of useable equity. This is calculated by taking 80% of it's value and then subtracting the current loan amount. Some lenders allow you to access equity up to 90% of the properties value but this isn't really relevant in your situation as $355k is plenty to start with.

Without knowing the specific details of your situation, the first step would be devising a longer term plan and working backwards from that. What is it that you want to get out of property investing? ie. a certain level of passive income by a certain age? From there, you can work out what sort of properties and the size of the portfolio that's required to get this done.

Once you know where you're heading – it's a matter of putting the plan into action.

The first step will be accessing some equity in your current PPOR.

How much to access will be dependent on your longer term plans and is something that should be discussed with your broker/banker.

Once your equity release is set up and you've got an idea of exactly what sort of properties you're looking to purchase, you can start shopping.

A decent finance person will structure your loans in a manner that ensures you don't hit a borrowing capacity wall too early, that your properties remain uncrossed and that your loans are structured in the most tax effective way. 

You'll be surprised at what you can accomplish with a bit of knowledge and a large chunk of equity.

Cheers

Jamie

You're more than welcome. I'm glad you find the info useful.

With financial advisors, many will steer you away from property as an asset class because they don't often make a commission on the transaction. 

For advice on borrowing capacity and finance structuring – any decent broker should be able to provide this service.

If you're comfortable with using email/phone then you can choose to use any broker anywhere in the country.

Cheers

Jamie

No worries at all.

Personally, I'd set up both as interest only with an offset attached to the one that's currently your PPOR.

I won't comment on the renting a room for storage point – it's the domain of an accountant.

Cheers

Jamie

Depends on who you ask.

Whether right or wrong – this sort of headline grabbing stuff comes out on a daily basis. 

Must admit though, I've never seen it referred to a "bloodbath"

Nothing new here.

Cheers

Jamie