I would be interested to hear how others would go about investing it in property, with one proviso -i want to buy my own place as well. Any help greatly appreciated.
Where do you want to live? What are the prices of houses in that area?
To get the most of equity and investing the best way I beleive would be to use your $100K on the house your going to live in as the loan for that is not tax deductable and then borrow back against the equity of your home to invest.
For example.
Buy a PPOR for 150K + costs say $10k. Total $160K less $100k for deposit and costs. Loan $60k and house value $150K.
This gives you equity of $90K. Most banks will let you loan up to 80% of a place without morgagte insurance so 80% of $150k is $120K.$120k less loan $60k = $60k to borrow to invest. This $60k you can use as a deposit on another house at $150k + $10k costs total $160k. loan $100k on house 2 and loan $60k on house 1 are tax deductable.
loans for $60k and $100k total $160k tax deducatable.
loan $60k not tax deductable.So you now have property worth $300k
Total loans of $220k.You would need to check the income of the second property against the loan of $160k and extras to make sure it’s OK.
Using the 11 second rule the place would need $300pw rent to be a excellent place.
ChrisAll post are IMHO.
I see. What is the 11 sec rule? Thanks for the info.
You can look in other posts to find the formula for the 11sec rule. the way i do it is take the purchase price and remove the three zeros {000} from the end. double that number and that is what your weekly rent should be. eg. 100,000 property.
100×2= 200. $200 is your aim for weekly rent. i think this works?? if im wrong please let me know..
im in a similar position to richman but i dont need to buy my own house. im thinking 4-5
80-100,000 properties with 20% deposit. will set up a trust soon aswell. might need to try commercial premises at this point in time. any other ideas would be appreciated..so you are putting a 100K into 4 properties? And hoping the rent pays of the mortgage? whereabouts do you live? I live in wellington NZ and I am hoping to find a decent property for under 200K as an investment, im willing to top up the rent a bit but not too much
Hi richman
If you can, find and purchase a property that gives you money back, rather than the other way around. There are quite a few kiwis that post regularly on here, and one thread that might interest you is
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=4541
Also, propertytalk.co.nz has a lot of info that should help you out.
Cheers
Mel
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