My partner and I are looking at moving in together and we want to start buying +ve cashflow properties.
I have nothing to offer in the way of a deposit but I earn $50K pa. He is looking for work.
He has a home worth about $250K oweing about $110 which could be rented for about $200pw.
What are your suggestions? Should we rent it out and buy one together? Or sell it and buy one? etc etc…
Help appreciated.
tammy,
You have a loan at 110k with rent potential of 200pw, with an average of 75% running costs you could get ~150pw income on the property or $7,800 py.Taking 250k at current rates over 25 years @ PI means you’re paying approx $1,600 pm mortgage or 19k py for 25 years. Assuming that you haven’t made lump sum repayments on your loan and that 110k has been paid down, you’re still left with paying approx 900 – 1000 pm on the property..so still neg- geared. (unless you got to 110k by making extra repayments). So can you afford rent on a home plus $1,000pm repayments ?[cigar]
I’m all pro building up IPs and holding out a few years before you buy your home. Time is money as they say .. the longer you have the IP the better, you have a good amount of equity in the property which banks like.. if anything the bank will like your equity and credit rating for loaning you money for your next purchase later (be that your home or another IP)…
[biggrin]
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