Forum Replies Created
- Jason957 wrote:Hello Guys,
Just a small introduction i am 17 and have been reading about property and very interested.
I wanted a bit of knowledge on the topic of loans and borrowing for the buy and sell strategy.
I understand there is some kind of insurance if your loan is under a certain percentage but how do you go with a buy, renovate and sell ? Do you still take the minimum amount and obviously have a buffer for renovations ? And how much does loan insurance cost ? also what are the tax implications with doing this over and over ?
Any other feedback and advice related to this topic is highly appreciated.
Thanks
Jason
PS: This forum is absolutely great , i have learnt so much in the past 2 weeks.
Hi Jason
The insurance is Lenders Mortgage Insurance (LMI). If you have less than a 20% deposit – than you'll need to pay LMI. With most lenders, it can be added to the loan amount.
It's a cost you'll need to factor into your numbers when working out the profit margin on the deal.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Aidan
Welcome aboard.
How much is it costing you to hold on to?
Is there any scope to add value to the property? I assume not.
Are there any indicators of future growth in the area?
Taking a $70k hit is tough – but if the property doesn't look like it's going to experience any growth and is costing you to hold onto, then getting rid of it could be a good option – but I have no idea about the specifics of your situation, the property or the area.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi noincome
Welcome aboard.
You need at least a 5% deposit and funds to cover costs – which as an estimate will be around 5% of the purchase price. So as a bare minimum – aim to come up with 10% of the purchase price.
Queanbeyan, NSW can be good – if you can pick up a cheap 2 bedroom unit in need of cosmetic renos you can add some equity quite quickly.
Logan in QLD has cheapies with decent yields.
North Adelaide is similar.
West Sydney is the same – but probably a bit more expensive these days compared to a few years ago.
Having said that, there's hundreds of areas that fit your description – so you'll need to narrow down your search.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Is it just me or does there seem to be more of these property investment groups popping up every day?
Hi propgirl – welcome aboard. This forum is a great free resource on all things property investing. There's also a lot of good books out there. I'd spend some time getting clued up – work out exactly what you want to get out of property investing and then devise a strategy.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Don't go above 90% with Homeside – even with LMI. Credit scoring becomes harsh.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Matt
Welcome aboard.
You'll need to be more specific about the area that you're looking to invest – BA's focus on particular areas.
Cheers
JAmie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Adam
That's the issue – a lot of people say "you should set up a trust" but a lot don't have a clue why.
This often results in new investors spending heaps on setting up complex structures that were not ideal for them.
A good resource is trust magic by Gatherum-Goss.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
god_of_money wrote:I have spoken to their "pricing team" and being told the MAX they will give for "new customer" is 0.96% discThey might offer 1.05-1.1% ~2-3 years ago depending on the LVR/application/amount etc
Anyone would light to shed the lights on current "best" rate for BIG4
1% off the SVR with ANZ is good. If you want lower, than maybe look at a no frills online budget lender like Ubank but be prepared to lose some of the features/policies that you enjoy now.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Shouldn't be too hard – just take in your last two years of financials so they can see what's been done previously.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
With loan account 1 above – you should also incorporate the purchase costs of the IP such as stamp duty which will take it closer to 25% of the properties value.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi again
Not sure if he offers that type of insurance but:
Richard White ANZIIF (Snr Assoc) CIP
Dip Fin Serv (Ins Broking) Dip Fin Serv (General Ins)
Managing Director
WHITE Insurance Brokers
PO BOX 2191, FOUNTAIN GATE, VIC 3805
16 STAR CRESCENT, HALLAM, VIC, 3803
T: 03 8790 5701 F: 03 8790 5702
W: http://www.whiteinsure.com.au
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
god_of_money wrote:I tried to do "price match" recently with ANZ Mortgage retention team. They are aware of bluffing tactics (ie. asking payout figure).My current rate is 5.4 % (1% disc through breakfree package). They declined to drop it further.
That's a decent rate anyway – I wouldn't worry too much. It's hard to get a 1% discount with them these days. Not like 18 months ago when it was the norm.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi there
I'm not an accountant so won't get into the specifics of your taxation related questions.
As a general comment though – I would never purchase an IP with the main motivator being to reduce your tax billed. The logic is flawed – you need to lose a dollar to get 40 cents back.
While the tax cuts associated with IPs are fantastic, I'd only view them as an added bonus.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
With auctions, you generally pay your deposit and exchange on the day – if you can't proceed with the purchase, you'll find yourself in a bit of trouble.
Best to get a preapproval in place just as added reassurance.
Best of luck!
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
thecrest wrote:Hi Richard.Is that a typo ? " I don't think you can go far by joining in the forum banter and discussion "
Cheers
thecrest
Insert a "wrong" after far
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Luke
The property might increase in value over time, you might renovate and manufacture equity or there could be a combination of both.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hiya
Try Pete Tersteeg http://www.sagelending.com.au/Contact.aspx
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Andy
Welcome aboard.
I'm a fan of purchasing a PPOR first and then using it to leverage into property investing.
If you can find something that you can renovate and add value to, you can get it revalued and hopefully access the newly created equity to use as the deposit/costs on your first IP.
Ive seen a lot of young couples start out this way.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Yep, agree with Terry – interest only repayments can enhance your borrowing capacity with some lenders as they take into account the actual monthly repayments.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Luke
Usually when the only debt they have left is IP related – then they might start paying it off.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
