Howdy,

It really depends on what you owe on each property versus what it’s worth – my advice is go see a good accountant pronto re the tax & trust set-up costs for one/both of your properties then armed with these figures go see a mortgage broker or two and get them to fiddle with the options to meet all your objectives – lowest possible rates,…[Read more]

Most loans above 80% require the borrower to pay LMI and the amount varies by lender, loan size and LVR. To be on the safe side assume about 1.3% of the loan value, ie $1,300 per $100K loan, and as the other guys have said – it isn’t huge compared to potential gains so if the deal stacks up, do it!

There are lenders out there who will lend up to…[Read more]

Hi Blue01,

I am a broker and novice investor in sunny Brisbane & happy to have a chat to see if you think I can help. My profile has contact details.

Cheers,
Mel

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Actually just realised the profile doesn’t have what I thought it did – my mobile is 0438 548 235 and email melanie@homeloanconnexion.com.au.

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Howdy,

Back on Brent & Richo’s concerns from what I have newly gleaned (ie no expert either!) trusts are a great way to borrow up to normal 80%+ levels where you have family members in the trust and directors of the trustee company, BUT the director who gives the directors guarantee on the loan does have their personal borrowing capability…[Read more]

Hi,

It’s insight #4 on pg 70 covering the chapter 5 material.[]

I’m up to pg 234 & loving it – the guy’s a common sense legend!

Happy investing!
Mel

Welcome to the site![]

Um – depends. Personal is simpler, cheaper (you already exist!) and unfortunately more susceptible to loss. Apparently worldwide NSW is the third most litigous (spell?) state after California & Texas, and Queensland is sixth – food fo thought. Therefore, if you are v serious about accumulating property assets, and face…[Read more]

Hi Christian & Terry,

Agree that most ‘normal’ lenders focus on serviceability & look for 2 years employment history – self-employed or otherwise but I have heard of folks with less work experience and very strong deals (ie cash flow +ve) having success with NAB as they think more like business bankers (don’t they own an NZ bank?) for the lowest…[Read more]

Hi Stuart,

Basically in scenario 2 with the offset a/c, the ACTUAL loan a/c balance never altered from $180K cos it’s I/O (but because there was $80K sitting in the offset a/c your repayments are calculated on having $100K loan only). If the ACTUAL loan a/c balance is decreased, eg through P&I or extra repayments, then you draw funds directly out…[Read more]

Just an idea – are they near a hospital or major industrial area with limited hotels etc around? I think Westan is right and normal tenant turnover would be a problem, so why not consider banking on that, furnishing the rooms and erecting a sign out the front saying “short-term leases available for $130 per week, minumum stay 6 weeks” or…[Read more]

Hi,

Also look under http://www.realestate.com.au under home price guide – postcode snapshops section. Gives you heaps of data about the area, can’t vouch for how up to date it is.

Happy investing,
Mel

Steve McKnight uses it to select property:

Basically if you divide the rent by 2 and times it by 1000 then that’s the max you should pay for it to ensure a return around 10.4% – and apparently this head maths takes 11 seconds.

Hope that helps, and if you find a pod of houses anywhere that fit the formula, let us all know !!!

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Mel

I agree Peter – the other way is to have an offset account on an I/O loan where you throw all your spare cash and get it 100% deducted from amount owing (hence effectively interest rate return) but it’s freely available to pull out and use anytime.

Offset accounts also have a great tax advantage as per following example:

Have own home worth…[Read more]

Hi Marie,

Depends where you are – agree local credit unions are often v quick, Homeside (off-shoot of NAB) are pretty slick as are Adelaide Bank & Macquarie – seen a broker? Brokers often know which bank has released a popular new product & had a subsequent glut of applications, they can also push your deal to the top of the pile if it’s…[Read more]

Basically yep.

If you’ve got no other equity or cash as security, then putting up 5% shows the bank you plan to stick around and not lose your capital contribution thru payment defaults and a fire-sale of you property for hem to get out.

If you were set up in the right kind of loan (eg partly line of credit) you could do minor improvements to…[Read more]

Hi Alf,

Ouch. Thank you for sharing the warning – I have a tendency to be a bit too trusting, educating myself through sites like this is inspiring and helpful.

As for that Cad advisor, I hope you believe in the Karma Fairy, I do, and I’m sure with help from the forum crowd she’ll smite this guy in no time, and set you and your family on a…[Read more]

Hi Adam,

Wish I’d had your determination 10-something years ago !!

A lender called Liberty may finance you into a deal BUT you’ll need about 20% of purchase price as deposit & it would help to have a strong deal – ie strong +ve cashflow. Initial interest rate will be higher than everyone else too, but will decrease annually with good repayments…[Read more]

Hi YoungGun,

Only know Oz lenders but as picja1 says, given you sound largely self-employed (& diverse!) you can lend on a low doc or no doc basis with a lot of lenders at following percentage of purchase price:
Metro (eg Brisbane) – up to 80% low doc at 6.5-7.5% interest, up to 90% no doc at 8%+ interest.
Regional/Rural (eg Townsville) – up to…[Read more]

Slum Lord – you are a legend!

My partner & I bought our first property, a little terrace house in Clayfield, Brisbane, last June at the reported ‘top’ of the cycle and now with about $80K equity growth for $20K reno’s are mad keen to refinance and start investing – heading out to check stuff out to buy in west Brisbane this afternoon. We are…[Read more]