Option 1 – I wouldn't be purchasing an IP to benefit from negative gearing. Your borrowing capacity and disposable income will be pretty low whilst living off one income. Having an IP that's going to cost a fair bit to hold doesn't sound like a good idea to me.

Option 2 – If property prices move, you'll be chasing your tail. I would be inclined to buy when you can afford to buy.

Option 3 – I like this option accept the "pay off the mortgage" part since you've indicated you may rent it out. This is a serious mistake. Here's a blog entry that explains why.

Cheers

Jamie

I used this online company to fit out an IP last year, I was pretty happy with them – www.cheapa–blinds.com.au/

Cheers

Jamie

Similar thing happened in NSW towards the end of last year. Particularly in the lower end of the market.

Cheers

jamie

I'll keep it very simple.

Yes – fixed rate break fees still exist.

Yes – you will have to pay it if refinancing.

Cheers

Jamie

First he'll need to save a deposit. Secondly, speak with an independent broker about his options – his age may mean a reduced loan term is required. If he has an existing credit facility with a lender that might come into play (if he's demonstrated good conduct with that credit card or loan than it will have a positive impact).

Lenders look at the applicants statement of position (assets and liabilities) relative to their age. If his applying for a 95% lend with little or no assets – the lender will be asking questions. The broker will need to present a sound argument in regards to this (providing there is one).

Cheers

Jamie

Hi Glen

Cashflow is important in property investing. Personaly, I view using the banks money (which is tax deductible) and preserving my own own savings as a risk mitigation strategy.

Cheers

Jamie

Depends on the circumstances.

As a general rule, we aim to use the least generous lenders first and save the most generous lenders to last.

Cheers

Jamie

Hi Glen

Welcome aboard.

I can't comment on those particular areas. The Herron Todd White month in review usually has a write up on regional areas which you might find useful- http://www.htw.com.au/Month_in_Review/Month-In-Review-May-2012.pdf

Is there a particular reason why you'd prefer to use your own cash rather than equity? At least the latter will be tax deductible and you can keep your cash stored in an offset as a "contingency" fund.

Cheers

Jamie

There's no set rule – there's certainly no 30% of income rule.

All lenders determine your borrowing capacity differently – some will allow 100% of rental income whilst others will only allow 75%

Some will take the repayments you make with other banks at their actual value whilst some will add an "assessment rate" to them – which inflates the actual repayment.

Maximising borrowing capacity is all about careful structuring. It's about using the right lenders at the right point of time.

A good, independent broker that understands how to structure finances for multiple property purchases will be able to work out a plan with you.

Cheers

Jamie

Like Richard said – anything above 90% is difficult. Firstly, the lender's policy must allow it – secondly, your application is going to need to be flawless including excellent conduct with current loan facility, good serviceability, a low number of recent credit file hits and about a dozen other things need to stack up.

Up to 90% is more manageable – we do 90% cashouts a fair bit.

Cheers

Jamie