Hi Hadoman,

Just a few things to hopefully get you started. I have worked on a few applications whereby the investor has a property of say $350k. They spend $80k for a GF. Therefore you imagine that the property would be worth $430k. However when the lender's valuer values the property it often comes a little less say $400k. So do not assume that the construction cost of $x will certainly increase the value of the property by $x. This is important when is comes to finance. 

Secondly, you often do not need to go to council to get approval for GF's.

Take a look at this site for the conditions:

http://www.legislation.nsw.gov.au/fragview/inforce/epi+364+2009+sch.1+0+N?tocnav=y

Also re area – try looking at Mt Druitt and somewhere close to the station – there is plenty of investor activity their due to the rental yields and low entry points.

Hope that helps you in the right direction.

Regards

Shahin

Hi There,

You normally engage an architect if the end product is going to be high standard. 

I did a development in Sydney's west (we had to work with smaller resale value) and hence we engaged a builder that did everything for us. It was much cheaper than engaging an architect. 

Is there a specific reason you are engaging the architect before a home builder?

Regards

Shahin

Ok so your LVR on your new property is going to around 88% assuming that the value of your current PPOR is $350k. How have you determined this amount? Have you recently done a valuation or are you estimating?

Regards

Shahin

Hi Leyashyash,

The longer you can stay in the smaller mortgaged property the better. Higher IP mortgage means higher negative gearing benefits. Are you taking the equity from your PPOR to fund for the new IP purchase? Are you going to 80% LVR ot 90% LVR?

Regards

Shahin

Please please please ensure that you have an exit strategy, i.e. what happens when the mining stops and people start to move out? You need to factor this. 

You can either approach a Valuer directly or have a broker order the valuation for you (this is the cheaper option). 

Bank's minimum deposit is approx 8.5% and the maximum LVR increase is 90%. 

Hi,

I have personally gone down the duplex path and it has yielded some great results. I have done this in the Wenty area. 

Just a few questions – do you currently have the DA and if so are you subdividing before building or building and then subdividing? Will it be torrens or strata titled? What is your current LVR and what is your LVR after construction? Are you planning to live in one of the properties or rent/sell both? Will you live in the property whilst you are planning the DA?

Please note that if you are constructing the dwellings as 'owner builder' then lenders either have a restriction on the LVR and hence how much you can borrow and secondly some lenders do not even allow owner builder loans. 

In terms of the zoning – jump onto the Fairfield council and download their DA guide. Also speak to the council's town planner. It is a free service but be warned that you need to be prepared for the meeting (usually they meet you for 10 minutes at a time).

Regards

Shahin

Hi JD,

It is tough question to answer as you may need the $28 car as a lifestyle choice. If your first objective/strategy is to get into the market then the question is can you sell your car and do with a cheaper car?

The biggest thing that I see face first time buyers isn't servicing but the deposit. For example, if you are pruchasing a house for $400,000 then you would require at least $38,000 in deposit. If you are eligible for the $7,000 grant then that is $31,00 in your own funds. So you are quite limited with what you are able to do with a $10,000 deposit.

What is your budget? Is the property a PPOR or IP? Which state are you looking at purchasing?

Regards

Shahin

Hi Peter,

Sounds like you need to share your tips on where you are finding these PG IP's?!

Interest only is great which is why a lot of people use St George for SMSF IO loans. They have a good product and of course a linked offset. 

The only thing with St George is that you need a company guarantee for a 80% lend.

Regards

Shahin 

Hi Fox House,

Welcome to the forum.

You have be careful with regional areas as I have seen many investors not achieve any/very little capital growth.

Secondly, LMI is not necessary a bad thing as it is tax deductible. The biggest issue with investors starting out is deposit to fund for the property purchases. Many (not all) do not have an issue with servicing but more with having the funds to facilitie the IP purchase. I would suggest planning out a few strategies over a 10 year period. Your first point of call is a broker and an accountant. You need to take into consideration CGT consequences as well as the negative gearing benefits. 

Regards

Shahin