Hi, I’ve just joined Property Investing and am keen to get out and start buying property. However, I don’t really know where to start. I purchased my first home (principal residence) over 12 months ago and keep hearing about equity to purchase other investment properties. Could someone please explain (in layman’s terms) how I do this. The purchase price of my home was about $340k and my current debt is about $298k. Lately there has been a lot of articles about ‘single mums buying 18 houses in 18 months’ etc and I want to jump on the band wagon to secure my future. Please advise – sorry for the lengthy garble.
Originally posted by gal_rabbit:Hi, I’ve just joined Property Investing and am keen to get out and start buying property. However, I don’t really know where to start. I purchased my first home (principal residence) over 12 months ago and keep hearing about equity to purchase other investment properties. Could someone please explain (in layman’s terms) how I do this. The purchase price of my home was about $340k and my current debt is about $298k. Lately there has been a lot of articles about ‘single mums buying 18 houses in 18 months’ etc and I want to jump on the band wagon to secure my future. Please advise – sorry for the lengthy garble.
Hi gal_rabbit,
Buy every Margaret Lomas, Noel Whittaker, and Jan Somers book and read them all. Every question will be answered and then some.
Regarding using equity, the banks will generally let you borrow up to 80% of your property value (after they value your property), less any outstanding loans.
Therefore, based on your figures; assuming no capital growth since you bought it, your debt is higher than your 80% of property value ($272k). You won’t be able to borrow anything right now.
Keep reducing your debt as hard as you can for another 12-18 months, the house will appreciate 5-10% (hopefully) and you will be ready to go. Use this time to learn, learn, learn. Read, study and do some market research (due diligence) for practice.
By the way; don’t believe everything you read – it’s probably a wealth creation ‘expert’. Steer clear of them.
There are other ways to get into the market with no money, but they are risky. Don’t go there.
The other option is to move out of your own house, use it as your investment property and rent somewhere else yourself. Every cost of your own house (including the loan interest) will then be tax deductible and can accelerate your equity position more quickly if done right.
Sorry to bring you down to earth; sorry for this lenghty garble.
Cheers,
MarcHi GalRabbit,
You can actually borrow up to 100% of the value of your property for the taking out a deposit if you wished, although this may not be the most advisable thing to do. Certainly doing as much reading and research as you can will only help you in the long run.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044
You must be logged in to reply to this topic. If you don't have an account, you can register here.
