Hi Ben,

A couple of things to consider:

1. What is your current income, and what total loan amount do you think the bank will allow you for the next property? This can be determined by simply asking the banks or mortgage brokers.

2. The bank may not consider the value of the property to be the same as your estimate – Make sure you have some comparable sales for properties in the area, and provide these to the bank when you apply for the new loan. This will determine the equity you have for the next place.

3. As you presumably do not have much additional cash at the moment (because you put a fair amount into the first purchase), you will most likely need to borrow over 80% of the purchase price of the next property. Make sure you include Lenders Mortgage Insurance as a cost in your calculations when looking at the next property.

4. Unless you are on a substantial salary, the tax concessions for the property you already own may not be that significant. This means that the property you already have is likely to be negatively geared, and may make it difficult to purchase another one – Make sure you do all the calculations for the monthly costs against your current income to make sure you don't overextend yourself with your next purchase.

I don't mean to be discouraging, and I think its greated that you have purchased a property early in life, but I also think it is important to know what the potential speed bumps will be along the way.

Let us know your thoughts as you progress with the idea.

Regards,
Steve.

Hahaha – I'll have to wear one next time

Nice to meet you D, and all the others of course. Sorry to those who I missed (my fault for rocking up late!)

Thanks for organising aaabbbccc – great work! By the way… I shall now be referring to you as aabbcc at all times (or until you tell me it's annoying!)

Look forward to catching up again!

Cheers,
Steve.

Depending on serviceability and LVR, I might be able to do a SMSF lend without PG's.

PM me if you are still interested.

Regards,
Steve.

Thanks Rich.

The flat decision could perhaps also be due to some banks passing on more than the previous 25 point RBA rate rises last year. This generally cools the jets of the microeconomy for a while – It's almost like the banks doing the RBA's job as the majority of 'interest rate' related transactions for average families are through the bank in the form of home loans, personal loans, business loans etc. 

Rates could still go up in the coming months, but we will have to wait for the meeting minutes to know the RBA's full thought process. Personally I don't really mind either way…

Also there is a chance that one of the properties was overvalued before… This would cause one to go up (which was probably correct before), and the other to go down.

Not saying that this is what happened, but i've seen a few property valuation decreases in the last couple of years.

Someone quite close to me got ripped off by a scam like this… Despite how amusing these scams are, I can't even bare to laugh at the guy considering making the payment.

On the offchance that this comment actually makes a difference… PLEASE DON'T DO IT!

Not spam mate – just interested.

Used to learn a lot from certain people a few years back and just wonder where they are.

Why so cynical?

I can make it there too…

Full points for trying though…

Love your work sprunk – that's what negotiating is all about, and you get better at it very quickly. You will get different reactions from different agents and start to get a feel for what price they think the property will go for.

I also totally agree with DW and GOM – let them stew over it for a while! The worst that can happen is that they sell the property for a higher price than you were willing to pay, and you go look for another deal.

If they call you back, and you are still willing to pay $260k, then make sure you negotiate terms that are more favourable and comfortable to you as you are now the one with the power!

God I love negotiation LOL!