I agree with Benny. Try to check it yourself if you can or get your Property Manager to have a look at it before replacing everything with new ones. Also investigate more on how this happened as the tenant could more likely be at fault here and not a normal wear and tear type of damage.
I don’t think there is a 100% guarantee to that @hydramax. You can check the reputation of the developer and ask around as well. Check their history and such. Another con to OTP purchase, and there’s so much more. So be careful with OTP purchases.
There are still 95% loans majority for owner occupiers.
Qualifying for a 95% loan though is a bit harder these days due to strict assessment of different lenders with these types of deals.
If it will take you longer to save up the 20% deposit. Try to hit the 88% LVR as LMI premiums tends to jump in high intervals above 88%. You can definitely use LMI to your advantage as opposed to saving up 20% if it will take you a lot longer to get there, property prices might move up during the time you are saving as well.
This type of property is not uncommon in QLD.
The way they use this now is that they cater to large families or family that live together with their extended family. A bit hard to find them though.
If it is of legal height downstairs, you can get tenants on a separate lease.
If it is not, they sometimes have one on a lease and the other on a short term contract.
I would not risk doing that If I were you due to the reasons you have highlighted as well as potential insurance issues.
One of my property in QLD is prepped up for dual occupancy, legal height downstairs with a kitchenette and toilet. Good thing I bought it with the tenants in place and has been living there for a while. Large family but they only use the downstairs as their entertainment area.
as per Tony’s comment above and just to add to that.
1.) Work out your borrowing capacity at the moment with a broker. This will also add filters to your search in terms of location. No point researching in areas worth a million dollars if you can only afford $500k.
2.) Work out your end goal then work backwards. How are you going to achieve that end goal? i.e. 80k passive income in 10 years? you will need around $2m in asset base unencumbered giving you a 4% yield per year conservatively. possibly 4 houses worth 500k each then pay it down. how? that is what you need to figure out.
3.) talk to an accountant/lawyer to determine which buying structure is beneficial for you? own name? trust? etc.
4.) research. network with real estate agents, property managers during the research or simply employ a good buyer’s agent. they know their stuff and are a hell lot more specific and detailed in looking at properties than any other new investors.
5.) keep reading and asking questions.
Consider looking at the west side of Melbourne. There is a lot happening there at the moment, with that price range, you can definitely find something in the West.. although personally I prefer the Eastern side as it has a more natural growth given that it is a more established area than the West which is going through a lot of developments and some areas are going through gentrification particularly the Werribee areas.
Not a recommendation, just a general opinion of the area.
As mentioned by my colleagues above. There are a lot of things to consider on the finance side alone in buying an investment property.
On a very basic explanation, lenders take in all your income (PAYG incomes, rental incomes, other acceptable income etc) less all your debts (mortgage, personal loan, car loan, credit card limits, hecs etc) to determine your take home income. From there, they will determine how much you can afford. Lenders then assess the take home income uniquely, some are more generous than others but most add in so much buffers to lessen their risk (adding in sensitized rates, assessing it at principal and interest repayment at 25 or 20 years etc)
Again that is just a very basic explanation of it, different lenders assess each deal differently. So best to speak to one of the brokers above and run through your situation with them.
This is interesting. I have just replied to another forum member from Hobart. Looks like the our friends from Tassie are getting active again. Maybe you can start one Deanne? This could be a start of a regular meeting in Tassie.
All the certifications, diploma and trainings are important but finding a good mentor is where you really need to put all your effort in. They are invaluable in the long term as they will share with you their industry knowledge and that is what will make you a good broker. Not all the textbook reading can equal the teachings of a good mentor. As brokers, we provide solutions for our clients. Having a mentor who is experienced in proper finance structure is of paramount importance IMHO.
I would start by saying I know no one in Hobart with the professions you are after. In saying that though, do you really require a face to face meeting with accountants and brokers? It is more time efficient and more convenient for both parties to communicate over the phone, email or skype. There are heaps of property investment savvy accountants and brokers around here. Just do a quick search and connect with the people that you think you can work with and start from there.
Just keep in mind that if you sell a property within 12 months, you will be liable for a full capital gains tax. so make sure you take that into consideration when you calculate for your net profit.
If you are planning to build up a property portfolio, consider keeping the property and doing equity releases instead.
Buy a run down property – do cosmetic reno – order a new valuation and tap in to that increased value of that property. Just a basic outline but there will be so many things to take into consideration with this.
As Corey mentioned, we do meetup frequently here in Melbourne. One in the East and one in the West once a month.
Group of investors just catching up. Everyone is welcome so if you are in the area, please drop by. :)