My partner and I are self-employed and produce only a low income from our business, but it does cover all our costs including our rent. I have however received $100,000 in compensation from an accident I was involved in 3 years ago.
We are now pondering how to use this payment to produce an income.
We are considering buying a residential property with the aim of selling it on quickly and eventually building a selection of properties, some of which we would rent.
I am hoping someone could point us in the right direction. We realise that $100,000 isn’t a lot in the property world but will it be enough to approach the banks with considering that we are self-employed and low income earners?
With some good decisions, would we be able to intially obtain two properties? and how?
In six months we are considering either moving back to England or to the USA….so we are completely open-minded. We would also be first time buyers.
You could buy a positive cashflow property for 100k or less which would increase your income. You could then borrow against this property and the new property to do it over and over again each time improving your position. It will take a lot of looking to find the most suitable positive cashflow properties though.
The Mortgage Adviser
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Essential LinksOriginally posted by tiffanyd:We are considering buying a residential property with the aim of selling it on quickly and eventually building a selection of properties, some of which we would rent.
Why onsell quickly? There are many expenses buying and selling property – it is generally considered a mid to long term investment – so quick selling will probably leave you with a loss. The only exceptions are if you are buying in a hot market (most areas of Australia are pretty slow at the moment. It’s a good buyers’ market, but don’t expect fast capital growth), property renovation/development, or a flip.
$100,000 cash is a great starting place. Because of your low income, you will need to find a cash flow positive property – and a hefty down payment like this will certainly make it easier.
Once you’ve bought the first place, you can use the equity in it to purchase a second Investment Property without selling the first. The lender will consider the first property as security over the second. Because of your low income you will need to continue with a cash flow positive strategy, unless you are up to the task of renovating for sale.
You could also consider tapping in to the First Home Owners Scheme for your first property. This will give you an additional $7k to play with, but you are required to live in the property as your Principle Place Of Residence at some point within the first year.
You can then either leverage off the property to purchase an IP, or you can move out and turn your PPOR into an IP.
hahahaha… Great minds think alike! Beat you buy 14 seconds!
Do me a favour Luci… get over to the Internet Cafe thread and throw some more pearls of wisdom my way. You have some excellent knowledge about a lot of things!!!! I would appreciate ANY good ideas.
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksHi, why not buy 2 cheaper properties straight up.
We are just in the process of buying 2 properties in the same block for 107K and 110k with rent return of 155 per week each. If you put 50k towards each including costs on something similar then they will pay for themselves and you could keep renting until you leave.
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