I can see what you’re hoping to do. It’s a little complex but can be done to a degree. Which lender are you with? Some are easier than others to do this.

Hi callum,

‘Normally’ when you split a block, the front house does drop but the new block is usually worth a good amount more than the drop in hte first property.

The two properties will be both securing the existing loan so unlikely to need LMI. That said, once the new titles come through it’s a good idea to create new loans for the properties…[Read more]

Couldn’t even google them up.

If you need an investment loan there’s loads of awesome brokers here – why not try one of them? At least you can be confident they know what they’re doing :)

It depends on lender. With CBA, they will look at IO loans as P&I over 25 years, where they’ll look at P&I loans over their actual term.

For other lenders it’s different, so don’t follow that advice unless it’s specific to your circumstances. There are other effects to having P&I on investment loans that can cost you a fortune in deductions…[Read more]

I’m interested too. Not sure where to start or who to believe.

The who to believe bit is a tricky one.

I would speak to a few independent people rather than going to a one-stop shop – the people who are doing everything (ie, the property finding, the conveyancing, the lending etc) have too much incentive to get the deal across the line. I…[Read more]

The who to believe bit is a tricky one.

I would speak to a few independent people rather than going to a one-stop shop – the people who are doing everything (ie, the property finding, the conveyancing, the lending etc) have too much incentive to get the deal across the line. It’s much better to have a few independent eyes on the deal – for eg,…[Read more]

The other broker was prob a noob who didn’t change the repayments to P&I over 25 yrs in the calc :)

I used to live in Hobart, if that counts ;)

Many accountants and brokers are happy to work via skype/email/phone if you have trouble finding a good one locally.

Hi Matt,

As mentioned, on a $350k property you’ll need a larger deposit. The stamp duty in WA will be $11125 if you’re going to rent it out, but is only $390 if you use your FHB, so that will make it worthwhile to look at.

Buying costs can be around $3000 for legals and inspections so you’ll need to budget for that too.

You’ll need a minimum…[Read more]

25 years is fine for a loan term – I’d even stretch it out to 30 years if you can. This lowers your repayments and lets you use the saved cash for other investments. You could also think about using interest only payments – this allows you to save more into your offset account, and have easy access to cash if you want to buy a home/move OS…[Read more]

Is it actually negative geared?

If you have reason to assume better capital growth in the future, you could hang onto it and either access some of the equity to put toward something else, or just hang onto it and let it do its thing.

If rates went up and it did become negative, would you still be happy holding it? Will it need any major work…[Read more]

Hi Andy,
If you use a deposit smaller than 20% you will most likely need to pay LMI depending on the lender. But this is not all bad – depending on your strategy, it can allow you to buy more property more quickly than if you put down 20% for each property. I often recommend a 12% deposit plus costs – this keeps LMI down, and positions you to…[Read more]

No it’s not, assuming the lender doesn’t take Prop 1 as security by default. Always check your loan documents before you sign them!