All Topics / The Treasure Chest / Newbie question – Should I be looking at IPs

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  • Profile photo of jacy_mjacy_m
    Member
    @jacy_m
    Join Date: 2003
    Post Count: 1
    July 3, 2003 - 1:23 am

    I dont really know anything about IPs, but am wondering with my current situation if it is something I should consider or not.

    Current home loan $132,000 ($10,000 redraw avail)
    Home recently valued at $200,000
    Gross income of approx $43,000 per year

    I think that my current income will be a limiting factor in servicability of future loans. Is this correct? Should I be looking to invest? or just sitting tight for another couple of years?

    thanks

    Profile photo of scottscott
    Member
    @scott
    Join Date: 2003
    Post Count: 110
    July 3, 2003 - 11:16 am

    Hi jacy_m,
    Your in the right place, what you want is positive cashflow properties. While these may not see the capital gains that some inner city properties have seen, they will pay for themselves and leave money in your pocket![8D]
    Any property with returns higher than about 8% will actually add to your income thus increasing your borrowing capacity (over about 10% you start to get some decent cash in your pocket).
    The other advantage to this type of property is that they are cheap (under 100K)! So it is easier for lower income earners to borrow the amounts of money needed.
    You have a bit of equity in your home so you can use this to fund the deposit and legals for an IP.
    Remember if you are borrowing all costs include them in the purchase price when you calculate your % returns.
    Talk to one of the mortgage brokers that frequent this site, to see exactly what you can and can’t do. I’d highly recommend ProSolution, I’m using them at the moment, and Stuart bends over backwards to help anyway he can!
    Lastly stick around here, there is some really good advice given out by some of these guys it’s worth a fortune![;)]

    Best wishes,
    Scott S

    “Aim for the stars and you’ll shoot the top of the telegraph pole. Aim for the top of the telegraph pole and you’ll shoot yourself in the foot!”
    -anon

    Profile photo of Stuart WemyssStuart Wemyss
    Member
    @stuart-wemyss
    Join Date: 2003
    Post Count: 598
    July 4, 2003 - 3:25 am

    Thanks Scott.

    Just to clarify… when Scott says “bends over backwards” [:O] he means this metaphorically not physically! [:D] Sorry, Firday afternoon, long week… time for some humor.

    Cheers

    Stu

    Property & Finance News
    at http://www.prosolution.com.au

    Profile photo of hwd007hwd007
    Member
    @hwd007
    Join Date: 2002
    Post Count: 247
    July 4, 2003 - 5:14 am

    time is now buddy !

    Profile photo of jacy_mjacy_m
    Member
    @jacy_m
    Join Date: 2003
    Post Count: 1
    July 4, 2003 - 8:27 am

    Thanks for your comments…

    Im going to use a bit of the money we have to do up our PPOR a little (to stop it falling down around us basically), and then see what we have left over.

    Profile photo of PhooperPhooper
    Member
    @phooper
    Join Date: 2003
    Post Count: 7
    July 5, 2003 - 1:18 am

    jacy_m,

    i completly agree with these other comments – get into it now. Start finding out what you need to buy your first place.

    Your situation is better than mine – go for it!

Viewing 6 posts - 1 through 6 (of 6 total)

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