Not an accountant either – but I wouldn’t think they were deductible.

Cheers

Jamie

I’m not sure of the level of bureaucracy involved in putting up a granny flat but I’d assume it would be less involved than sub-dividing and building a new dwelling.

A granny flat would provide another income stream – which would increase the yield and turn the IP into CF+. It would also increase the value of the property.

However, if you’re able to sub-divide and establish a separate dwelling, I’d be inclined to go down that path. These types of blocks don’t come up often. I recall reading about a guy in Spence doing something similar recently (API or YIP mag – can’t remember which). He did pretty well out of it.

Cheers

Jamie

Hi 0to130

Welcome to the forum.

Sorry to hear about your experience.

If you’ve decided to invest in property, I’d spend the next few months getting clued up about it. Read widely – there’s some good books by Margaret Lomas, Michael Yardney, Steve McKnight, Jan Somers (to name a few). There’s also a couple of national magazines – Your Investment Property and Australian Property Investor.

This forum is also a great FREE resource – full of knowledgeable investors and professionals who are willing to answer questions.

It also helps to surround yourself with a team of IP savvy professionals (accountant, mortgage broker, etc)

Property isn’t going to make you rich overnight – you have to be in it for the long-term.

When you’re ready to purchase an IP, you could look at tapping into some of the equity in your current home (I would keep that $30k cash for emergencies as you’ve mentioned). Use the banks money (not yours).

Cheers

Jamie

Hi Shel

When shopping around, you need to be careful about inquiries being logged against your credit file. Too much activity on the credit file could jeopardise your chances of getting the finance. I’ve seen it before – someone pops into a few branches and by the end of the day, a few lenders have provided pre-approvals (resulting in 3 or 4 hits to the credit file).

Probably best just to work with one broker that you feel comfortable with.

Cheers

Jamie

Great! Thanks for sharing Andrew.

Cheers

Jamie

Hi Engelo

Yep – you have it revalued by the lender, explaining to them that you’ve carried out renovations.

Some lenders will allow you to “top-up” your loan to 90% of the properties value.

If the property is worth $200k – you could possibly top-up the loan to $180k, which gives you around $50k to play with.

I would encourage you to set up the $50k as a second split so it’s easily identifiable in the event that it’s used towards further investment (ie. tax deductible).

Cheers

Jamie

A client of mine just picked up a 2 bedroom unit in Logan for $170k – renting for $250 p.w. It looks like he’s also added some equity through some quick renos.

Cheers

Jamie

Hi Rachel

That’s good news and good on you for fronting up to the PM. I hope it all works out.

Cheers

Jamie

Hi Shel

You could speak with another lender for a second opinion. Different lenders have different ways of calculating borrowing capacity – some are more generous than others.

However, all would base your borrowing capacity on hubbys income alone if he’s the only one working. Unfortunately, while your cash savings are impressive, the bank will want to know that you can service the debt.

Are you planning on heading back to the workforce? Once you’re back at work, this will improve your borrowing capacity.

My advice would be (and it’s going to sound biased) to speak with a mortgage broker who can assess your borrowing capacity across a range of lenders.

Cheers

Jamie

Hi Magic

Yep – you would be going off a pre-approval. Definitely make sure you get one done. A week or two after the auction for approval sounds about right. Auctions come with greater risks – but can also yield greater rewards.

Cheers

Jamie