Forum Replies Created
Hi Rstarr
As you are reasonably strong on the serviceability side of things then selling and renting will maximise your borrowing capacity.
Note: your partner will essentially be qualifying for the loan as most lenders will not consider your income if you have been self employed for less than 2 years.
On a personal note I will continue to rent for the next few years as I would rather invest my equity/money in investment property rather than have 20% equity sit in my PPOR. But that’s only my view of the world.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auOne advantage of selling and renting is that you will have access to 100% of equity. Whereas, if you purchased again you would have to leave 5% to 20% of equity in the property. Notwithstanding that fact that you would have to pay stamp duty on the new purchase.
From an investing perspective I would sell and rent.
However, if you are weak on the income side of things then renting may not be the way to go because the lender will take account of your rental expense. This may reduce your serviceability. If you are self employed then you could use a low doc loan.
Some info on the value of your equity and your income and employment position would help with this analysis.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auAll property advocated work on commission. That’s fine. But don’t reward them for spending more. Set a target price at the outset and fix the fee (e.g. Target price is $250k. Fee is 1%. Therfore fixed fee is $2,500).
I would suggest firstly considering the qualifications and experience of the advocate (member of real estate institute and valuation experience are, in my opinion, essential). When you are happy with them then get them to suggest some properties. I would review the reasons why they suggest purchasing a particular property. Ensure those reasons are sound and in line with the fundamentals of property investing.
Do your own research (to confirm their assessment).
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auBruce,
Positive cash flow strategies are not for everyone. There is merit in both strategies (i.e. investing within 15kms of CBD and investing in high yielding country areas). You have made some gross generalisations that are perhaps a reflection of your lack of knowledge in this area.
I would think its every investors aim to secure strong tenants. Weaker tenants can be found in all areas (even in Sydney).
Good luck with your investing.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auA purchase of $190,000 in SA will cost you approximately $198,500 (inc. stamps, etc.).
I suggest you finance 80% of the purchase price through a separate loan (therefore, $152,000). The remaining 20% plus costs would need to be financed by drawing down on the equity in your existing property. You would need to draw down $46,500 ($198,500 – $152,000). As such, your redraw of $20,000 is insufficient. You will need to increase your loan to $151,000 (Being $104,000 + $47,000). You will need to do this first so that you will be ready to pay for the deposit.
Your overall LVR will be less than 80% therefore no mortgage insurance cost.
You should be in a position to qualify for a loan of this size (based on $58k salary + $10k rental income).
Hope this helps.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auThanks very much… you guys are making us blush. [
]I’m pleased that our efforts are appreciated.
Cheers
Stu…& Josie
Property & Finance News
at http://www.prosolution.com.auI can’t see any issues with it so long as the property will be used purely for investment.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auGood one Dave!
Oh by the way, I am working more to earn more because I want more… so I’m probably adding to this…sorry.
People are working more, earning more, paying more and want more. I think that bar has definitely lifted.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Ish
It may be classified as a commercial property for finance purposes (but depends on the zone and the lender). They might accept it as a residential property but they certainly would not take into account the office rental income in their serviceability calc.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auCall Homeloans Ltd – they should be able to help you out. http://www.homeloans.com.au/
However, if you are not earning any income then please consider the risks with increasing your borrowings. What happens if interest rates increase? What happens if you have a vacancy? Just be aware so you are making an educated decision. My advice would be: 1. get a job 2. start investing (not the other way around).
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auI got this from Moores Legal website (www.mooreslegal.com.au)
quote:
What is a Vendors Statement?Before a Contract is signed for the sale of real estate a Vendor must provide to a Purchaser a Vendors Statement as required by Section 32 of Sale of Land Act. Vendors Statements are also known as Section 32 Statements.
The Vendors Statement gives specific information about the property to a prospective Purchaser. Such information includes the zoning of the property, the current rates and outgoings, the measurements of the land and whether there are any restrictions on the use of the property.
What if the Vendors Statement is not valid?
When selling a property it is important that all required information be included in the Vendors Statement. We recommend relevant information be obtained directly from the various rating and planning authorities.
Vendors should be aware that there are risks in providing a short form Vendors Statement that does not include all relevant information. If the information contained in the Vendors Statement is incorrect or incomplete a Purchaser may be able to withdraw from the Contract of Sale.
Buyers should seek advice on the Vendors Statement before signing a Contract of Sale. A Lawyer will be able to identify any issues of concern relating to the property before a Contract is signed.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auI would definately say the car loan. However, check for early repayment fees. Sometimes you can avoid these by paying $14,999 and leaving $1 in the loan.
As a general rule, always pay the higher interest bearing debt first.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Guys
I have finished it. It’s going through the editing stage. I hope to have it ready in the next couple of weeks.
Please manage your expectations… you start to worry me when you use words like “masterpiece”. Please, keep expectations low. That way they are easy to exceed.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi
There are heaps of Case Law and tax rulings on this. It’s a very messy area. You can claim interest cost, etc. in some circumstances. Definitely refer to your tax adviser.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auYou would need to consider foreign exchange risk.
Aust. banks will not lend against properties located outside of Australia… the US is probably the same.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auIn the absence of another answer…I would say an opportunity. But perhaps stay away from the new developments.
quote:
Yes you can buy a 1br unit for less than 60K and rent it out for approx. 100 a week…..What more do you want?
Try no to over analyse.
By the way, if it’s truly a good area then perhaps people on this forum may not want to say this publicly because they don’t want every Tom, Dick and Harry competing in their market. Maybe I’m wrong…
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Keesha
Welcome to the forum.
Purchase a copy of Australian Property Investor (“API”) magazine. In the back is a State based post code list. It lists the average rental yield for each post code. That might be a good start.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.au
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