This could be a lengthy post so would appreciate patience. Where to turn to for assistance, I am not sure, so the knowledge people here have copped the questions.Such an ecclectic group bound to come up with some theories.
1. 57 and 54 years old,
2. Wanting to quit full time work 3 yrs.
3. Relying on investing to keep us after (very little super)
4. A NegG property value $340k owe $283k
5. PPOR used to buy other properties (9)
6. Other properties valued at $855k
7. Income gross from all properties $1974 /week
8. Have unemcumbered propety valued at $345
9. Have approx $50k availabe in equity.
Sooo – have maybe 50k + $276 (80% *345)
available for further properties.
10.Able to add job income to rents of further
purchases (if we buy more)
11. Value of IP properties is $855k and owe $830k
12. When we purchase, like to nett approx
$30/property regardless of what it is.
13. We add wages to the loans to pay down as wellWell here goes,
Should we purchase more properties using the deeds available or pay off the debt as quickly as possible remembering I have 3 years b4 giving up paid employment .Maybe asked another way would be : Will more rental income pay off a bigger debt faster than leaving as is and just paying the existing debt down.
Have tried to do some figures but not sure how to calculate.
Cheers for now Len
More income always pays debt down quicker. I would be looking at my structure to ensure the fastest possible debt reduction program you can implement.
You seem very highly geared across a lot of your properties. Buying additional properties (good ones) will certainly decrease your overall risk through diversification but buying poorly may see a collapse.
If you feel comfortable at the repayment levels you will incur by buying additional properties, talk to your accountant and a mortgage broker and do it. If you are concerned about such high debt levels, which I think you are from your post, pay it down as quickly as possible and look at more properties at a later date.
Retirement from paid employment does not mean retirement from investing!!!
TMA
http://www.email4money.info
Essential Links
First Home Buyer WebsiteLen,
Things do not compute. From statements 4 and 8, you appear to have $380k in Equity but in 11. you seem to have only $25k equity.
Something needs correction Is 11. giving correct numbers?
Benny
Benny,
The properties in 11 are in addition to the unencumbered property in 8 and the negative geared property in 4. That is how I read it. The 50k figure used throws me.
TMA
http://www.email4money.info
Investor Links
First Home Buyer WebsiteThanks Guys for the responses so far .
The neg geared property we do not class as having equity available so basically we have $50k from a current LOC available plus deeds to the value of $345k purchase price therefore giving us $276k (ie 80%) which I would assume would be available for use.
Also looked at my figures again and have to say that the value of the Positive IP’s stated does not include PPOR or the NEG property so overall valuation is a lot more.
To get us started when we did, we did not always have deposits, so used equity to buy some properties outright and then contribute extra funds ,effectively building our deposits after we purchased the property. We have still managed to keep our nett income positive so things will get even better as we pay the loans down
TMA , we are not concerned about the debt level because we believe we are covered with some reserves for interest rises etc. Just looking to finish my current job in 3 years even if I/we work part-time or just invest.
Perhaps I should have asked for some thoughts or/and ideas rather than the question of some calculations.
Thank you for the input anyway and look forward to hearing more ideas.
Cheers Len
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