^ yea you got the basic.

OTP has it's place, especially for units, so yes even though you can't choose the design it make sense especially if your buying a unit – imagine if a developer is building a 100 unit project and all 100 owners wants different design, that would be a nightmare! as the builder need to maximize the space + apply for council approval.  

Personally im not a big fan of OTP from a investors point of view…

effects application …which CAN in turn effect borrowing power if the bank you wanted to go with ( ie a good "serviceability lender" rejects your " application" .

Example: Homeside has a good serviceability model, however they do credit score…

Suncorp don't credit score but has a average serviceability model

Hard to sell + lack of Capital growth if any as mentioned.

I saw one for Quest in Haymarket sydney, was advertised for under $520,000 now it's under $450,000 and still haven't sold 1 year later lol

^ easiest option is to get a quote from a builder/handyman etc…

But it doesn't hurt to do some of your own research on cost as well- The internet + ringing around will work wonders

Either way, make sure you have a buffer. 

Personally… the rental yield is way to low for my investing style- even thought it's a >6% yeild..the return in $$$ figures is to low for my liking. UNLESS your buying the property below market value and there's a good chance for capital growth or to create capital growth + higher rental yield.

4 main strategy that i follow, that you may or may not agree to;

1. Positive rental yield form day 1 – the $$$ figure needs to be >+$1,000 per year

2. Buy below market value…so that i can re-value the property 6 month later and draw my deposit back and go again in a short period of time

3. Ability to create capital growth- subdividing/ structural renovation

4. Ability to increase rental yield – rented below market value ?renovation ? dual occupancy? granny flats?

Every investor is slightly different….but it all comes down too " what will this property do for me financially" now and into the future- don't buy just because you can or because it's cheap….

Agree with Jamie.

Nothing wrong with LMI, especially if it allows you to enter the property market quicker +if it's an IP, you can claim this over 5 years in your tax returns.

LMI would cost you around $6,500 for a 95% $200,000 purchase and all you need for a $200,000 purchase is $15,803 in total ( incudes 5% deposit + stamp duty) as the LMI cost can be added to the loan as well depending on the lender.

The question is;

1. How long would it take you to save up $40,000? VS extra $5,803?? and would the property price go up by more than $6,500 during this time? + benefit of rental yield/rental return.

^ Yep, residential security for commercial purposes- resi rate. 

Problem number 1- Your going for a 90% LVR loan and all your deposit and cost are borrowed in the form of a personal loan – a majority of banks won't accept your loan as you have NO genuine savings at all…you literally borrowed everything as a personal loan; if this was a gift  all ok but if it's a personal loan that's a big no no….Having said that there's 1 credit union and a non-bank that will accept this set up ( will allow for some of the  personal loan to form part of the deposit – not all) but your file needs to be absolutely strong! 

– Employment for over 4 years with same employer

– Full time perm

– Low consumers debt, beside the personal loan

– Satisfactory conduct for  savings account

– Must have SOME form of savings, at least 2-3% of the purchase price

– Strong income to service the loan + the personal loan 

– Good credit file with low actives 

Easy said than done. Cosmetic renovations hardly get you the amount of equity your after…ie you spend $20k on painting and new carpets…the valuation may not even go up…and if it does won't be over 20k ( 97/100 of the time)

+ where you  gonna find the money for the renovations? 

Expect or plan to hold the personal loan for atleast 2-3 years on average maybe even more….it's not impossible to increase your property price by >15% but it's not easy as well. 

Also this is subject to the LMI allowing you to pay out your debt with their new loan!

Overall NOT impossible, as i have done this for previous clients ( 2% of purchase price held in savings- borrowed the rest from personal loan and get a standard  loan for the rest) 

but definitely rare as a few hoops to jump through! 

Alex your view as a whole is ok….but consider trying to save the min 5% and the rest is fine, as we can stick your loan with a normal lender and there's no need to worry about the personal loan or stamp duty.

Cheers

^ yes this is possible, but not all banks.

Well if i worked and lived in Bali…i def won't be going anyway as well

…oh i miss my Bali holiday …