Small world

It wouldn't be too hard to beat this – as for the $500 refund, tread with caution as Terry and Banker have mentioned.

Agree with Terry – also makes it easier to access cash if another deal comes up in the near future.

Jamie

Hi Tony,

Self managing is not difficult (when things are going right). You'll need to get up to speed with the tenancy laws in your state. The form you're refering to is a tenancy agreement.

Cheers

Jamie

Hi Jac

You can still get 95% loans. You'll probably need to have an existing relationship with the lender offering them though. Which banks are you a customer of?

That said though, 95% loans aren't easy to get approved. Personally, I'd be inclined to go for the two IPs with the 10% deposit on each.

Cheers,

Jamie

Hi Jac,

I'm in favour of using LMI for the simple reason that you can buy more with less.

Here's a simplistic scenario.

1. If you were looking to purchase a property for $400k, and wanted to avoid paying LMI, you'd need to bring about $100k to the deal ($80k deposit, $15k stamp duty, $1k legal, etc). Just say that this property appreciates by 10% in the first year. In 12 months time, it's worth $440k. Not bad.

2. However, if you were willing to pay LMI, you could purchase two properties valued at $400k. You'd have to take out loans around the 95% LVR mark and the LMI would probably be about $10k for each property (which would be added to the loan).

However, let's assume that these two properties also increase by 10% in the first year. In 12 months time, you have two properties worth $440k each or $880k in total. That's $80k in equity that you've made in the first year. Even when you minus the $20k you've paid on LMI, you're still left with $60k – which is better than scenario 1.

Remember, this is just the first year, imagine if the properties continue to appreciate at this rate. Those two properties will worth a lot more in 5 years time than the 1 property you've avoided paying LMI on.

This is a very simplistic explanation, and I'm in no way speculating that property will increase by 10% per year, but it does show how you can leverage LMI to buy more with less and potentially grow your portfolio quicker.

Cheers,

Jamie

The company is Corpred – I've found them to be very good and affordable. Email sent.

Cheers,

Jamie

Hi Matt,

You should also get your PPOR valued when it becomes an IP. That way, if you end up selling it in the future you shouldn't have any issues with the ATO when working out how much CGT is payable. The CGT will be the sale price of the property minus its value when it became an IP.

A local real estate agent should be able to provide a written appraisal.

Cheers,

Jamie

Hi Jacqui,

If you need something quickly, I use a company where you fill out their online form and attach photos – from that info, they email you the depreciation schedule. Some argue that with this method certain depreciable items may go undetected (because a QS doesn't physically inspect the property). I can email you a discount voucher if it helps.

Cheers,

Jamie

Get a building and pest inspection. Approach a company directly, don't ask the Real Estate Agent for a referal.

Cheers,

Jamie