Tom is absolutely right. What they 'forgot' to also mention is that the rate is applicable to LVR's below 80%. Another thing that a lot of people also miss which is very important is the policy of the lender. What if the investor wants to development and build multiple dwellings, or is a owner builder or has a special type of security or is located in a area where only a certain amount of money can be borrowed. It is frustrating when these stories covering nothing more than just the interest rate.

You can draw upon the equity in your existing property either upto 80% or upto 90% depending on the lender and loan amount. However it is very important to set up the facility as a separate facility and not top up the existing loan for tax purposes. 

@ Michael – 100% on the money. Macquarie needs to tighten their policy if they want to get more business. Its a bit like rocks and diamonds with them. 

Contact the department of housing – the only issue is if the contract of sale only permits owner occupied housing. 

Firstly whats the asking price and secondly how far is it from the station?

You can still use the equity in the IP and get the securities separate. So your IP will have one loan for the IP itself with account number 'abc' in the amount of $325k and a second account number 'xyz' in the amount of $102,500. The $102,500 will be used as a deposit for the PPOR purchase. Also if you are going to go LMI (which you will need to) do it on the IP loan as you will up for less LMI than if you did it on the PPOR loan. 

@ Dark night definitely agree – there are massive 1000sqm + blocks of land in Werrington and Kingswood going for low $300k.   Plenty of opportinuty. 

I don't have complete visibility over the cashflow side of things but why not have the fees and outgoings coming out of the transactional account? I am not a huge fan of LOCs. For IP purchases I personally set up a separate variable loan with a linked offset. So there is a loan amount but all the funds are in the offset meaning no interest is payable unless you of course use it for the deposit of a new IP. You pay less interest and it helps a bit with your servicing if things are tight. 

Yes – basically at the quarterly committee meetings they raise things that must be done such as fire safety inspectation, finance audits etc. The committee decides who they should go with or if they should get multiple quotes etc. Remember if you are doing something – always get multiple quotes. Generally speaking, strata managers have arrangements with existing tradespeople and professionals and as such charge like a wounded bull. Make sure you are present at the committee meetings.

Hi Julz,

I assume you are in Sydney yes? 

Coupled of points; 70sqm is big for a 1 bedder however I think that they are not good investment vehicles. The body corporate looks a bit high (if I understood the above correctly) however with new developments, the strata generally tends to rapidly increase one the development has finished. The rental income is also a bit weak. I say this due to the yield and also due to the fact that I wouldn't expect strong CG over the upcoming years. The only positive with this IP vehicle is depreciation benefits and thats about it. If the development is off the plan then there are a huge amount of risk associated with OTP which you need to understand. 

Which area is this?

Regards

Shahin