Forum Replies Created
So your saying guys
I should loan 210k keep 10k for stamp duty and fees and put my other 10k in an offset account therefor reducing my loan amount to 200k anyway.
Wouldnt I be paying the same amount of interest as if I had of loan 200k and used 10k as a deposit to purchase a property worth 210k. Since the loan amount will be 200k either way I go. Therefor I would pay the same amount in interest in each case.
The advantage being in richards method I would have 10k or so to play with to possibly secure another IP down the track with some capital growth hopefully. However I would have LMI and if I used the 10 k as a deposit for another property I would then have higher interest payments if I hadnt paid it off.
Richard thanks for your reply on the tax side of things.
Im thinking I wont claim the FHOG as it would be to hard to live there for 6 months.
Can you shed some light on why I would go down the track of a 95% lvr for my loan instead of using my whole 20k as the deposit.
I did the calculations above being 393 negatively geared a month using your method compared to 141 negatively geared using my method of using the full 20k as a deposit.
Thanks richard
Thanks for your reply guys.
Richard I have a few questions for you
In taking a lvr of 95% instead of using the whole 20k as a deposit, since im loaning a larger amount the monthly payments will become higher and I would also have to pay mortgage insurance.
Is it correct that I could only claim 30 c in the dollar for the LMI?
Im looking at a purchase price of 210k and keeping the spare 10 k of my 20 k deposit for stamp duty and associated fees.
On a loan of say 200k i would be repaying 1041.67 a month @ 6.25%
I would gain a monthly rent of 900 a month.
Negatively gearing 141.67 a month.
However using your 95% lvr method
My loan would be 210k and I would be repaying 1293 a month
with rent of 900 a month
I would then be negatively geared 393 a month.
Thanks alot for your thoughts
Cheers guys
After alot of research into serviced apartments and the associated fees and low capital growth due to restricting myself to only being able to sell to investors Im staying away from the serviced apartment in carlton.
I can get myself a 3bdr home in melton for 200plus close to the main shops and public transport. There are also alot of developments on the way there.
I think this is the better option. Hopefully I will see some growth over the next 12 months aswell as put any extra cash I have into it and then use the equity to leverage myself into another property.
I did have a look over that thread. Its more relevant to a owner occupier situation.
Im looking at this as an investment property.
dwolfe
Im not to concerned about positive income. Being negative by 30 dollars or so doesnt bother me.
I am after capital gain to then use that gained equity to leverage myself another property in 12 months time. I dont see why the carlton apartment couldnt give me that gain. I think the area is perfect for it. close to shops , uni, cafes , restaurants, public transport.
I thought I dont really have to worry about the rental market the property appears to as I wont be needing to find tennants since quest basically is gauranteed rent for the lease.
I am working on finance at the moment. Finding it hard. Broker is saying since im looking at using my parents house as security the 'family pledge' type of loan doesnt allow purchase for IPs only owner occupiers and also my parents mortgage is not through a main bank its through a smaller broker which also seems to be causing issues
Thanks a lot for your reply guys.
I am trying to gain as much knowledge in this area as I can. Ask as many questions as I can and take it all in.
Now with my carlton 1br apartment it is a quest serviced apartment. Quest operating it as a 4 star hotel.
I am looking between 190 to 210k with a rental return of around $1293per month.
Is the whole quest thing something to look out for. What are your thoughts about these types of properties.
JacM
My purchase price would be 190k with an interest only loan. The rental return is $1038 a month. I am out of pocket around $50.
DWOLFE
I also now think its best for me to not sell my 4 properties but to use the equity in them to secure my PPOR instead of selling them and using the profit as a deposit. I figure its better to keep the properties and get them all cash flow positive.
Natalie
Your right on the money. All those reasons you listed I fully agree with.
Im going to go for the carlton unit.
DWOLFE
I didnt ask the financial planner if he owned investment property himself.
In regards to the supply. In 4 years time I believe there will be even more houses there as there is alot of land out there and the council has already stated another 3000 plus hectares will be used for residential purposes.
"You have a company, you lease your PPOR off your company. Market rent, deductions etc. (This is what I have understood is possible from others, it would be great if some of the pros could give more feedback on this system etc, please get your own advice on this one) " I will try and look into that to see how it works.
JacM
Im only on an average salary. With the 2 properties above I would only be out of pocket at maximum $50 a month for whichever one I choose . The loans would be structured as interest only where I would make extra repayments as much as I can to build up equity to secure another property every 12 months and continue that for 4 to 5 years.
cheers guys
I will be trying to gain equity so I can buy another property in 12 months time. I am hoping to have 4 propertys in 4 years. After 4 to 6 years I intend to sell them all or the majority in order to use the capital gain for a large deposit on my own first home.
I spoke to a financial planner today to get his opinion.
He basically said it all comes down to demand and supply. With melton he said because theres so much land out there and new estates opening up all the time once they are full then people will just buy the next farm and keep going further out since theres so much land up there therefore having heaps of supply.
He said on the other hand with the carlton unit the surrounding suburbs are much more expensive its close to shops and the uni. Aswell its right in town with a better supply and demand prospect. Meaning I would more than likely have a better gain with the carlton unit.
Thats pretty much where Im at at the moment.
Thanks guys. Either way i can loan 110% of the purchase price through the broker. Will be using my parents house as security. The carlton unit returns 1038 a month. Is around 30 square metres i think. Purchase price of 190k. The melton house would be a 3 bedroom returning 1070 a month. Purchase price of about 230k. I intend to rent it out for the next 4 years with an interest only loan making extra repayments as often as i can to build enough equity in the property to secure another one in 12months time. Once again your thoughts are greatly appreciated.
anyone?
