This by no means constitutes advice and is purely my own personal thought but I'm holding out to see what happens next month.

Cheers

Jamie

Hi again

You just need to work out the price that you're willing to pay.

To come to that price, you need to do a heap of research on the area, property, comparable sales, vendors reason for selling, etc.

Once you've determined the price – base your negotiations around it.

Personally, I wouldn't start off with a ridiculously low offer because you risk losing credibility.

Instead, start with an offer that allows for a couple of increases which will eventually see you hit your limit.

Best of luck.

Cheers

Jamie

Hi Johk

Yep, that's the exact reason.

Cheers

Jamie

It’s still available.

Cheers

Jamie

Hi Johk

The purchasing costs are a little out – they don’t add up but it’s close enough to what it would be.

You should factor in land-lord insurance – say $15 per fortnight for a unit.

Repayments on $299,500 at 8% rates should be $922 per fortnight (interest only) – don’t set this up as P&I

You’ll be able to claim depreciation as well – grab a depreciation schedule from a quantity surveyor.

Holding costs will be closer to $540 when you include insurance and change the repayments to $922.

You don’t need to pay LMI – you have sufficient equity in your PPOR.

Purchasing costs such as stamp duty aren’t deductible immediately but are claimed back when you sell (it’s added to the cost base for calculating CGT).

Ideally, you would want to set-up a third split here so you can identify your tax deductible debt (IP deposit) from non-deductible debt (PPOR loan).

Hope that helps

Jamie

Hi, welcome to the forum.

To avoid paying LMI you generally have to have at least a 20% deposit.

Your max borrowing capacity will come down to the income your partner generates.

However, on your income alone you could probably come close to servicing a $450k – $500k without using your partners income (that's based on the info provided and assumption that you have no dependents).

Cheers

Jamie

Hi Hirav

There's a sticky thread on "good books' here – https://www.propertyinvesting.com/forums/community/heads-up/6845

Cheers

Jamie

What are the vacancy rates like in the area? Can you call up some property managers and ask them about the rental demand?

If you're concerned about the property not being rented out then I'd reconsider purchasing in that area.

Cheers

Jamie

Redraw – you pay down some of the loan and take these funds back out. That's "redrawing"

Offset – is like a savings account linked to your loan. If you have a $10 loan and you put $1 in your offset account – you would only pay interest on $9

Difference between the two.

Redraw – when you "redraw" those funds, they won't be tax deductible if they are not being used for investment purposes. i.e If you "redraw" $20k from an IP loan and buy a car than that $20k won't be deductible.

Offset – it doesn't matter what you use the funds for. If you had $20k in your offset account and decided to use that money for a car – then you take the $20k out and your tax deductible interest repayments go back up.

It's a very simple explanation but there's no point in complicating things.

Cheers

Jamie

Hi Corie

Here's a recent blog entry which explains how Interest Only with offset works.

Cheers

Jamie