Forum Replies Created
those low doc loans must be real killers!!!!
while you certainly have the equity to go and buy more property (your lvr is 53%), i suspect that you broker is knocking you back due to servicability issues, i.e. hubby’s low income and your irregular income. is there anyway that you can stabilise your income? once i could do this, I’d be going to see another broker pronto. Eric
the `11 second rule’ is ONLY a guide. if you’ve got “From 0 to 130 Properties…..” re-read page 34 again. It will explain everything.
what is the value of the property?
Zeallous
It’s great that you’re so driven to start building your property empire. Well done! However may I be blunt;
– you mention that your cashflow is break-even and that you hate working for someone else. bad attitude. Without a regular income from a job working for `someone else’ the banks won’t touch you with a 10ft barge pole. And given that you’re `cashflow is…break even’ do you hardly think you’re in a position to even consider property investing??? $20K in the greater scheme of things is hardly going to get you a lot out there today either
– what are banks looking for? SEE ABOVE,
– the net has an abundance of (mostly) free info that you can ascertain things like council rates for different areas and even rents. and if you can’t find something, pick up the phone! call the agent.As Robert mentioned above, to satisfy yourself of whats being said here, my strongest advice to you would be to seek professional assistance. A mortgage broker (most will come to see you in the comfort of your home FREE) will tell you in no uncertain terms if you meet lending criteria.
For the moment Zeallous, I’d be putting that $20K in at-call cash account or if you want a better return in a managed fund of some description.
Good luck,
Eric
If you will occupy this home, then it would be better to go with a Principal & Interest loan structure. if you finance $235000 your monthly loan payments will be around $1644 based on a rate of 6.89%.
Highly recommend going to http://www.jaffasoft.com which will give you all the above info.
Eric
thanks for the response.
yes, i should have noted on the original post that i wanted to do both. and as we are intending to stay here for the foreseeable future, paying down the loan makes sense.
thanks again,
Eric
just as soon as i can build more equity in my ppor, i will be utilising a loc to finance the purchase of additional ip’s. a good friend of mine has done this with great success. i’m not sure though if having a loc is for everyone. i imagine it would be pretty easy to get into strife if you’re the type to spend cash on consumer items etc. a loc is a convenient way to have the cash to buy ip’s.
hi ije,
it really depends on where you want to invest. you will definitely need more than $20k to invest in sydney, unless you look at older style apartments in sydney’s west????
as far as deductibility of your rent payment, unless you run a business from there (you say you’re a salary earner) your rent payments are definitely not deductible.
eric
like any investment that one makes, you need to do significant research and due diligence to find out the type of things you want to know. as far as which area, you ain’t really going to get those type of answers here. where you buy is really a question of affordability etc. why not start with the area where you are currently living?? not a bad idea also to scour the various websites selling property or picking up some real estate magazines advertising property.
good luck,
Eric
hi lisa,
Welcome to the forum.
Following on from Derek’s reply, i believe you really to need to consider each property on its own merits, be it a unit or a house. I’d be cautious about purchasing an old-ish unit given the inevitable higher maintenance costs. And this is where it gets tricky. Body corporate’s can impose special levies over and above your regular strata levy to make repairs or improvements. Its enough to turn a cf+ investment into a negative one.
Good luck
Eric
just a thought; what does dad think of this plan???????
hi hotrod
i don’t think you necessarily need to inspect a property to buy value. the golden rule i employ is to spend the couple of hundred dollars and get the property inspected before purchasing. like others that have growing portfolio’s in virtually every corner of the country, with my other business commitments i could not manage to visit every prospective purchase.
cheers
Eric
like redwing, i would also recommend the jaffasoft website. very useful.
eric
you mean like the matrix???????? so thats what its all about. [weird] if only it were so easy though nehal, you know looking at blank wall. frankly i think something is not right here when a forum on property investment degenerates into some psycho mumbo jumbo……..
nehal, i’ve read a couple of your questions in the forums so far, and have to say that you will NOT get quality answers with the way your questions are being put to the forum. While I and many others on the forums congratulate your keen interest in property investment, I would strongly suggest speaking with a parent or other adult first and maybe get them to put to your fellow forum members the questions you want answered. But remember they must be specific questions. I’m afraid there really is no answer to questions like you’ve posted.
Good luck,
Ericyes [saywhat]
hi jen,
i recently purchased an ip with only 5%. i may be mistaken but i don’t think there is any rule that a 10% deposit is required. as i said, with the property just purchased the re agent was also asking for 10%, however i said that i would give only 5% as funds were tied up elsewhere at the time. he accepted. i would certainly recommend that you bargain with the vendors re agent in future.
a quick calc. tells me that if you convert you loan to i/o you will gross around $40 p/w. obviously this doesnt take into consideration maintenance costs, insurance etc. i think given the other costs, you still should be in positive territory. eric
i guess most here would be sympathetic here given this is your first post and all (welcome by the way), but this is such a broad question that i dont think you’ll get the feedback that you really want or need. try to give a detailed description to your situation. you will find here that most of us are only too obliging to offer free detailed info.
to answer your question, you will in most cases be using a mix of the two. i think you better re-read that book you just finished as it should tell you more about the kind of things you should be doing.
i dare say that you will probably be inundated with responses to your query.
why dont you keep the 1st property and use the ample equity that you have to buy the 2nd property?? with your ambitious plans to quit work at 40 to embark on a ft career in property investment, you will need all the property’s you can get. furthermore, bear in mind that as you only have around 7 years to get to your target, I like many others see that not a lot of property growth will be occuring over this period of time, making it difficult i feel to sustain a lifestyle solely off property investment. also you say that the strata fees are dead money. sure they are but as they are an expence, tax deductible?? speaking of dead money what about all the selling costs involved in the 1st ip??
bottom line i guess is that it depends on your goals. if youre investing to speculate then doing what you suggest is probably justified. but if your doing this to invest and accumulate, thinking about holding the 1st ip is a better way to go.
Eric
