I must admit it the property is only slightly positively geared when you are putting in 20% deposit then i think i would walking away from the deal.

LMI is an opportunity cost and can certainly enable you to expand your portfolio quicker than saving up a 20% deposit each and every time.

It is also a loan cost and therefore deductible over the the term of the loan or 5 years whichever is the shorter.

Many new investors don't fully understand loan structuring and make basic mistakes which can often not be unravelled.

If you are merely looking for cash flow and nothing else then why not balance a buy and hold portfolio with a couple of deals sold on an installment contract basis.

Cheers

Yours in Finance

I am assuming your investment monies are tight due to lack of savings or equity so i wont comment futher there.

Personally i wouldn't buy a unit due to the higher holding costs (Unless of course you buy the entire block but that is a different matter) as i can think of several excellent suburbs where you could pay a similar price to a cheaper unit and get the added benefits of the land.

More than happy to run you off a cash flow analysis on any property you look as we use a specific software which i like for my own property acquisitions.

Try and educate yourself talking to like minded investors in your area or engaging the services of a professional.

Cheers

Yours in Finance

Hi JSSMM

Firstly welcome to the forum and i hope you enjoy your time with us.

Met up with a forum member in Brisbane yesterday in exactly the same boat.

We discussed several strategies but in essence i would be looking at what you intend to do when you move out and if is buy another PPOR i would be considering taking your loan to the maximum (certainly wouldn't be sticking all of my savings into the initial loan).

An interest only loan with 100% offset will minimise your interest expenses (especially important whilst you are living in the property) whilst at the same maximise your interest Tax deductions when you decide to move out. 

You could even look to take the loan > 80% place your $15K FHOG in the offset account and accept the LMI cost,

Remember when you move out of the property the LMI will become a deductible cost and will be proportionally claimable over the remaining 4 years or the term of the loan whichever is the shorter.

Sometimes the structure and clever use of your money can be the difference in growing your portfolio quicker than normal.

Cheers

Yours in Finance

Depending on the Contract you sign with the agent Chris you well find if they introduce a willing and able buyer and you refuse to sign the contract you maybe liable for an element of commission.

Just read the contract and see what the conditions are.

Personally i would not sell but access equity and go again.

Unless the asset is poorly performing i am not a fan of selling and moving on for selling sake.

Cheers

Yours in Finance

Certainly getting the structure correct from day 1 is paramount when you enter the world of property investing however make sure that you costs involved are relative with what you intend to achieve.

I have seen many an investor set up an expensive structure only to find out they purchase a single property and then focus on paying down equity or find that the finance options available are not as they thought. 

Certainly seek the advice of an Accountant but also suggest your Broker is aligned with your set up as otherwise it can get messy and expensive.

Cheers

Yours in Finance

Hi Meles

Do you friends all hold ACL's?

Must admit i would have been surprised if they do as i don't know many of mine that do.

Cheers

Yours in Finance

Certainly can buy residential property inside your SMSF but you fail there on 'the related party' section of the SISA.

You could always sell the property and make a Deductible / Non Deductible contribution to your SMSF. 

Cheers

Yours in Finance

LC888 sorry to appear niave but i am not sure how buying a property with poor rental income but good capital growth prospects will aid your cash flow position.

Surely would it be a matter of buying properties that wash their face when it comes to the interest costs and that with a few dollars spent in renovation can add both value and increase the rent.

As a Broker and Financial Planner i must admit i would never be giving a client that sort of advice.

Built my portfolio on a combination of both cash flow and manufactured capital growth.

What happens if the market slows in the future. You have a property that is going nowhere and costing you hard earned dollars.

There are many ways to reduce your Tax position improve your cash flow without it costing you a fortune.

Cheers

Yours in Finance

Hi DK

Lenders would love to hear that you are offering them other properties as security for another property.

That is exactly what you do NOT do to expand a portfortlio.

Once you hit the serviceability wall with your lender there is no way to go.

Like driving down a narrow 1 way street and not having a reverse gear.

Cheers

Yours in Finance

Richard i think Steve has subsequently corrected that comment as it has been asked 101 times.

Be surprised how many forum clients i arrange finance for who believe that is the case.

In saying all of this there are some lenders who are very pro investment and have excellent serviceability models and other that arent as forgiving.

All part of getting structure right.

Cheers

Yours in Finance