Just done a 90% top-up for a client with ANZ. They were able to cashout $70k to go towards a 95% lend on there next PPOR. There were no dramas.

Cheers

Jamie

Ditto in the ACT.

Hi Sebestian

I take it those figures are a snapshot of how South Africa as a whole has performed. What’s the deal with individual areas? Which states are performing best/which are performing worse? What’s the average purchase price for a property within these areas?

I spent some time in South Africa a few years back and would be very interested to hear, in ballpark terms, how much property is worth.

Cheers

Jamie

Yep, agree with Corie on that one. Sometimes it just takes a bit of creativity to bolster the income a property derives. Cheers Jamie

Hi Propertyboy

The rate you’ve got sounds ok. You could probably get something a little better but you (or your broker/banker) would have to work out whether the exit/application/govt. fees associated with refinancing three loans will justify a small decrease in interest rates.

Do you have any concerns with your current lender(s)? Are they enabling you to access equity to grow the portfolio? At the end of the day, it’s not all about the rate.

Cheers

Jamie

Hi KLZT

Welcome to the forum.

Those numbers ($265 p.w on a $160k purchase) sound pretty good and are not unreasonable. Where are you looking to purchase?

In terms of rushing into things, only you can determine that. Have you carried out research on the property that you’re interested in?

Start with macro factors:
What are similar properties within the area selling for?
What growth has the area achieved in recent times?
What are the rental vacancy rates within the area?
Are any infrastructure improvements/developments on the cards?
What is it’s proximity to local amenities?

and then micro factors:
How many units are in the complex?
What are the body corporate fees?
Can you get access to and have read of the body corporate minutes?
Carry out a building/pest inspection on the unit
What are the vendors motivations for selling?
How long has it been on the market?
Is it currently tenanted? If so, how long’s the lease?

Have a close look at the numbers. Work out how much the property will cost you to hold each week after the rent has come in and the expenses have gone out. To mitigate risks, based these calculations on:

An interest rate that’s a couple of percent higher
The apartment being vacant for a period of time
A maintenance budget of $xxx

This is not an exhaustive list but they are some of the questions you should ask in order to ascertain whether or not a) it’s too good to be true and b) whether you’re rushing into things

Best of luck and I hope you do well.

Cheers

Jamie

It all depends on Keiko’s individual risk profile.

Given that he/she asked about high LVR loans in the original post I’m assuming that he/she is wanting to take an aggressive approach towards investing.

If that were the case, that 20% deposit could be spread-out across multiple smaller deposits to secure multiple properties within a short space of time. By taking out higher LVR loans (90 or 95 +LMI) and using more of the banks money, Keiko could commence building the portfolio quicker.

They could also add value to these IPs, with the potential (depending on the future value) to tap into some equity later on.

Obviously, this approach wouldn’t suit everyone, particularly cautious/risk adverse investors would would prefer to avoid LMI and contribute a larger deposit.

Cheers

Jamie

Hi propertyinfo

Brokers generally have software that provides this info and is updated frequently.

A website you might find useful is http://www.theadviser.com.au/ It’s a publication for mortgage brokers but it does have regular updates on what lenders are doing in terms of changes to their policies, promotions etc.

Cheers

Jamie

SD – Stamp Duty (also a rip off)

Hi Jherden

Welcome to the forum.

The choice is ultimately yours, but here’s a few other things to consider.

The costs involved in selling property (such as real estate fees, bank exit fees, etc) can be quite significant- so while you’ve got $40k in equity at present, this can be eroded quickly after the properties been sold.

Look at your property from an investment point of view. Is it in an area that you believe will achieve decent growth within the coming years? What is the current vacancy rates within the area? Do you think you’ll have any issues attracting decent tenants?

If you decide to keep it, there are ways to improve affordability – you can convert the loan to interest only (to minimise repayments and increase cashflow) and there’s also depreciation to claim. There’s also the benefits of negative gearing which you’ve alluded to.

If it helps, you can have a play around with this spreadsheet to get an idea of how much it will cost to keep your PPOR as an IP – http://www.passgo.com.au/pass-go-investment-property-analysis-tool

All in all, you only purchased the property a couple of years ago – so the transaction costs involved in buying the place two years ago and selling now are likely to dramatically reduce any profits.

If you think it’s got potential as an investment, it might be worthwhile holding onto it. If you don’t think you can afford to keep it as an investment, then it might be best to sell up and move on.

I hope that helps and best of luck with the new job.

Cheers

Jamie