Hi Paddy,Yes, the banks will be interested mainly in you servicing both debts and also in having the equity available for the deposit. You also want to make sure your own cash flow can handle any increases to interest rates for your own peace of mind.Another point is that if the lender you are currently with doesn't allow a refinance to 95%, your…[Read more]

…if only every seat was marginal…

Great to get the mindset of investing going and one of the first books I recommend anyone to read is Rich Dad Poor Dad.Some of his other books (Rich Dad's Guide to Investing for example) I feel are not a balanced view at all.

Is the 60k equity you refer to free equity at 80% or is it the total equity availble (ie do you have a $335k loan)? Assuming it's available at 80%…To avoid LMI you'll need 20% deposit plus costs (approx 5%), so about $87,500 for the investment property.If property values continue to increase at recent historical levels (say 8-10% in Melbourne),…[Read more]

Hi Celmel,Agree with all points above, plus…Depending on the lender, you might pay a 0.1-0.3% premium over a term loan product.Different lenders will also allow you to capitalise the interest (i.e. don't pay the loan off) and continue to draw down until it's limit, which can make it an effective cash flow tool.There are also more elaborate ways…[Read more]

If appreciation is the big one for you, then consider that the Melbourne CBD historically hasn't appreciated as well as the inner city ring (2-5 km from CBD) as the land content is much lower in high density than low density. There are duties savings if you buy off plan (but then you don't have to sell right now either, you can conmsdier a deposit…[Read more]

What a difficult question to answer…Assuming no costs to acquire the assets and appreciation of proeprty value only, then I'd be looking at a compounding return of 12%p.a, which equates to a $77K return, but in the Melbourne market we've seen properties double in value in 3 years, so it always comes down to good asset selection…I'd be unhappy…[Read more]

Hi Casanovawa,Based on the $300K loan there is a special discount off the standard variable available, depending on the LVR you are aiming for (90% max) but is only available in the period it states (you can lawyas try for the discount if it's over but there's never a guarantee). Hence why it's alwys a good idea to speak with a broker who can shop…[Read more]

If servicing is really tight I'd suggest the Homeloans Ltd calculator.

Hi Sassy,If you sell and buy again later you are up for exit costs and then entry costs which can get up around the 10% mark total across both properties and this can take a fair while to earn back, so trying to hold if you can afford it is my suggestion, its all about your cash flows and possible future lending options.Once you get the income…[Read more]

Hi chiller.You have a few options available to you and it depends on your long term goals.Where abouts is the land? I'm taking a stab but I'd guess in the outer western (Tarneit, Truganina) or northern (Sth Morang, Mernda) regions? If so there are a raft of properties you could select to develop.The new house will get you some Stamp Duty savings…[Read more]

The fact that it's a 50-50 split just goes to show we should do our own research and get educated to make the best decisions ourselves!This is best evidenced by Morgan Stanley's US economist stating Australia was a "Ponzi" property market. There's nothing stopping anyone making a comment and if they're wrong, they'll simply never reference it,…[Read more]

For sure, the land tax is scalable based on the aggregated holdings you have. You'll also find that your structure will affect land taxes in certain states (eg: a company structure will be charged more in NSW so many companies have moved their storage facilities to QLD). Therefore many sophisticated investors share there holdings throughout the c…[Read more]

Definitely, and who know's, you might even get an acceptance on the offer!

No, the stamp duty is based on the purchase price only and isn't affected by you being from Victoria.The only additional charge is on Commercial property where you might have to pay GST on the duty (although this should be mentioned in any special conditions of the contract).

No doubt there'll be a lot of opinion on this, but my opinion is that it won't be anything like what we had in the recession. You can have a look at the economic outlook pieces available with ANZ to see what they have to say about the matter.My thoughts are it won'r be as worse because:Monetary policy very different now to what is was 20 years…[Read more]

From my experiences and dealings, you must have fixed price contract as the quotes can always blow out whereas a fixed price contract gives the banks the security of knowing that the job will come in at budget (and hence the lending is safe).Owner builder jobs will generally only lend to about 60% of finished value (St George Bank is…[Read more]

Are you planning to do the renovation yourself?Some lenders will give you the money for the renovation (similar to a construction loan), as long as you have a fixed price building contract. That way you might also get the bank to do a valuation based on the "completed" value of the property.

Do you have to move ouy into the new property?If you can't move your current home to another owner and tax breaks are a must then have you investigated buying the next property as an IP?

The share market is a totally different mindset so it would be best to get some education there as well.Not sure where you live but if you are in Melbourne a good place to start is The Educated Investor bookshop in the CBD.You'll find a heap of places that'll charge to teach you, but best to have a look at a few first and make your mind up from…[Read more]