Hi Guys! I am new to both this forum and property investing and I was hoping to pick some brains on a property we are looking at buying.
At the moment, because we only have about 5% deposit, the property is not entirly cash flow positive, that is the rent covers all the expenses and some of the loan but we will still be out of pocket about $80/wk to service the loan. Because this is our first property, we were thinking that we would purchase it (hopefully cheaper than advertised therefore reducing our out of pocket amount slightly) then refinance in a year or two, which should bring it to a positive cashflow property. Also, it is in a proven growth area and we would look at doing some renos on it becuase the kitchen inparticular looks like its from the stone ages! The property is in SA in an outer suburb of Adelaide.
Also, do you thing purchasing from photos and the building inspection is sufficant or should we get a buyers agent to look at it?
Any help or suggestions you can give me would be much apprecitated!
Thanks in advance![biggrin]Hi Heidi
Firstly welcome to the foum and congratulations on taking the first step into property investing.
I will sound like a broken record if you read any of my previous posts but of the things that is of prime importance when starting out is to ensure that you are structured correctly.
Too often i see clients who have gone out and purchased a property and then realise a couple of years later that they have purchased this in the wrong names or entity and that their loan has not been set correctly.
A small bit of time spent getting it right upfront will put you in good stead for the future especially come to Tax time.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Hi Richard,
I am 22yrs old and am looking at buying 5+ properties over the next 10years. I also already managed to save $25k in 13months of working and that includes living away from home.
When you talk about making sure you get correctly setup for the long haul how would you recommend setting everything up a single male which great dedication, ambition and self-control if I were looking at buying multiple properties over 10yrs?
Cheers
Paul[suave2]
Heidi,
You may also wish to consider getting some information from the tax office about getting any atx benefit that you may want to claim on a weekly basis rather that waiting to the end of the tax year once your tax return is done. Your accountact should be able to best advise regarding this.
Matt Reeves
Mortgage & Savings Consultant
SaveonBills
e: [email protected]Hi Paul (dare to dream)
Many people get confused or simply do not understand what Loan Structuring involves. It is not a matter of running out any buying 4/5 properties and then realising that you have purchased them in the wrong name or wish that you had the loans set up correctly to be most Tax efficient and effective.
Each client i deal with has different goals and aspirations and therefore there is no blanket answer (feel free to contact away from the forum if you wish to divulge personal information).
All i would say is that as time progresses your objectives in wealth creation may change so if you establish they way in which you will purchase your properties correctly then your portfolio can change with you.
As an example a recent forum client contacted me to advise me that they had just paid off their mortgage securted against their PPOR and were over the moon. The only problem was that they had decided now to move to a bigger home although didn’t wish to sell the first property as they thought it would be an ideal rental.
When i explained to them that there was no problem in acquiring a new loan for their PPOR but the interest would not be tax deductible they were devasted and assumed that as the funds would be raised against what would be a IP this would be the case.
We have now managed to re-structure their finances in such a way that all of the interest is Tax deductible and they will end up paying cash for their new PPOR. In saying this there was some costs associated in doing this which could have been avoided.
A decent MB with loan structuring experience should be able to map out for you a long term plan and solution on how you can progress with each and every property.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
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