Hello, I’m in a strange situation and looking for some advice to help me to begin my journey to financial independence:
Here’s my situation: I’m an American citizen, I came to Australia in July 1999 as a Uni student, and I still am a full time Uni student completing my MBA. Therefore, my employment income is basically zero. I have approximately $20,000 saved up from working previously and interest which I am looking to put down as a deposit for an investment property. I have spent the last year reading books on Property Investing (first starting with Rich Dad Poor Dad, moving on to Real Estate Riches, Real Estate Loopholes, Own Your Own Corporation, and 0-130 Properties in 3.5 Years by Steve McKnight).
I have decided to use me savings to invest in positive cashflow properties, and through my searching I have actually found some that look very promising.
Here are my questions:
Are there any American citizens out there investing in Australian properties? How do you go about it? Where do you get finance from – USA or Oz? Where do you pay tax to once you invest in a property – USA or Oz? One more note is that I am currently applying for permanent residency in Australia ( I love this country too much!!) – anyone know of my options then?
Secondly, Does anyone know where a Uni student with no employee income (a USA citizen as well) can get an 80-90% loan from, if it is a postive cashflow property?
Any advice on mortgages for Uni Students with some extra savings for a deposit but no employee income for a positive cashflow property, or for an American citizen trying to enter the Australian property investment market would be greatly appreciated!!!
Cheers,
JenHi JenD,
You are starting from a bit of a rough spot, but i guess we all have to start somewhere! First of all your questions…
I know in Australia and New Zealand (and assume it would proberbly be the same everywhere), you must borrow the money from the country in which you are buying. The reason for this is banks don’t like using a security in a diffent currency incase the dollar crashes and there security is left worthless.
As for where you pay tax… it depends where you are a “Resident for tax purposes”. Keep in mind everyone will want a slice of pie.
You are going to find it very difficult to get a loan. What i suggest is you find someone that has no money, but a steady income and team up with them. I know this is sometimes easier said then done, but where there is a will, there is a way.
Hope this helped
Dan.
Looking for positively geared property? Check out http://www.positivelygeared.com.au
Thank you Dan,
Maybe you (or someone else) can help me with some more questions – I am considered a “Resident for Tax Purposes” in Australia because I have been living here since 1999. (I also obviously pay taxes in the USA as I am a citizen)
Also, I am considered to be in a “defacto relationship” since I have been with my boyfriend since 2000 (he’s an Aussie citizen who doesn’t have much money, but a very steady income – he’s a pharmacist) – and luckily loves me enough to trust my judgement (many people think I’m nuts wanting to invest in propery for a positive cashflow, not for appreciation) – could I make him a part of a company that I could own to invest in property with?
Thanks for any advice!
Cheers,
JenSurly you can do a loan based on the IP component
if the property is to be rented and the rents cover the payments.. and you can prove you have saved the deposit…This is the same as an overseas investor wanting to buy in this country.
[cap]EZYHi Rob,
Here are the answers to your questions:
I am looking at buying an investment property in a rural area of Victoria or South Australia or North Queensland (this is where I have found some positive cashflow areas that have met my criteria of +10% yield)
I am based right now in Mickleham, VIC – which is about 10km from Melbourne Airport, and I used to live in Townsville, QLD.
I am currently studying for my MBA -Master of Business Administration – specialising in Change Management and Organisation Development; and Human Resourses and Employee Development – if anyone is looking for a Graduate in any areas similar to these (or Property Investment) I am a prime candidate.
Thank you for your help,
Cheers,
JenYou have to prove to the bank you have a savings record too. Without that the banks won’t lend you any money, unles you have a large deposit and it is gifted to you. Even then hey still want to see regular income (say from a job).
The reason why banks won’t simply lend on positive cashflow without you having a job is that what happens if the place sts empty for a while, like up to 6-7 weeks???? In rural areas this can happen.
Perhaps start up a trust with your defacto, so that they use his income, and it is quite tax effective. Gettig any part time job (with one where you can work as many or as less hours as you want is great!) can really help you get a loan.
Rgds.
Lucifer_auRgds.
Luicfer_auHi Jen,
I think you will find many of use here studying and trying to achieve our MBA’s
… Millionaires Bank Accounts…
Cheers and GoodLuck,
sisYou could do a No doc Loan , which means you sign a paper stating that yes you can afford the loan
depending on where the property is depending on the amount the lenders will lend you,loans available from 80% down some country area’s are 75,65.60% loans
If you dont start to ask you won’t get an answer, and yes I would say find a Broker, he or she can find the best loan and best lender for you and your situation.
Its EZY[buz2] We realy should have a page where we could all offer our services, butcher baker candel stick maker , Broker ,conveyancer,etc.JenD,
Check with the FIRB as to whether you qualify to purchase the property.
Generally foreign citizens are only allowed to buy NEW dwellings in Australia. Dunno if your status as a ‘Resident for Tax Purposes’ will help you.
Frankly given your situation & time of life I think you’ve got much better ways to spend your money right now than in property
You don’t even know if you’ll be staying in Australia long-term….and no matter how steady your boyfriend, it sounds like you’re taking a bigger risk than you might think.
Enjoy your MBA – and make sure you back it up with plenty of real-life practical business experience….I’ve seen a lot of MBA graduates out in the workforce, and have not been impressed with most of their common sense (usually absent) or business acumen (ditto).
Cheers,
Aceyducey
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