Hi
I would like to start on the track of investing. I am willing to learn and have read many of the posts on this forum and found great advice.
If I give you my current scenario could you tell me what you would have done in the same situation?
I am 28 years old, earn $56k pa, I live with my partner (who has about $150k equity, though I want to do this on my own). My expenses are about $500 per week, that’s being generous. So I usually have about $600-$700 spare per fortnight. I have no loans or credit cards.
I never have any tax deductions and I’m ready to make a change.
I’m undecided if I should be the cheapest house I can to fix up a bit and rent out, or wait until I’ve saved a deposit for one. Or buy my own house first. I should add that I have owned a home before so I’m not a first home buyer.
Anyway if anyone has any spare time I would really appreciate their advice.
Tammy
Hi Tammy and welcome to the forum.
I guess as you currently reside with your partner the question of whether the property would be a PPOR or an IP is irrelevant and these days the only real difference in cost is the initial stamp duty which of course varies dependant on the State you end up buying in.
If you don’t wish to utilise any of your partners equity you will be seeking a 100% loan which is availble for investment but bear in mind that you will need to cover the costs of acquisition and some of the lenders fees.
I also assume that you will be purchasing the property in your sole name although if this is not the case consideration should be given to a Trust structure set up.
In purchasing the property remember at one stage in our lves we have probably all rented a home so try and make the place as appealing for your tenants as possible. Whilst buying an old home and doing it up may sound attractive it can become costly and you will not be receiving any rent in the meantime.
Initially i would suggest corresponding with a mortgage broker who can analyse your position and ensure that the loan product you select is right for you both now and in the future. Refinancing away from a higher interest rate loan can be expensive and uneccesary especially if set up properly in the first place.
Richard Taylor
Residential & Commercial Finance Broker
**Lodoc Commercial loans from 7.39%**
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Thanks for such a swift reply.
I don’t understand the trust structure stuff yet though I am researching at the moment.
I guess a lawyer is needed as much as a mortgage broker.
How much do you think I should save to get a good start with fees etc? $10k?
Usually costs are about 5-10% of the property you are trying to buy.
Without equity you may need to save this up.If your LVR (Loan to Value) ratio is more then 80% you usually have to have LMI (Lenders Mortgage Insurance). LMI is for the lender not you. This could add a few percent to the cost.
So your looking at about 110% of the cost of the property.
So a $300K property would cost about $330K all up.Have you purchase property before in your name or with someone else? If not you maybe able to get the FHOG
http://www.firsthome.gov.au/There are plenty of ways to get lending done so as Richard said speak to a Broker to get the ball rolling on what you can do.
ChrisAll post are IMHO.
Originally posted by Chris-Syd:Have you purchase property before in your name or with someone else? If not you maybe able to get the FHOG
http://www.firsthome.gov.au/If you have you still may be able to get the FHOG too.
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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