I'm desperate to get my second investment property, things haven't worked out as I had hoped. I have a property in waterloo sydney with less than 100k in equity and i rent in melbourne. I have about 50k in personal debt which is causing the problem i think, I'm told i can buy a cheap property in Melbourne with no deposit but can't get a cheap investment property with no deposit. My wife and i earn around 100k per annum. Does anyone have any ideas besides paying my personal debt off over the next ten years.
darrenholmes68 wrote:I'm told i can buy a cheap property in Melbourne with no deposit but can't get a cheap investment property with no deposit.
Darren
I don't understand this part of your comment. Can you clarify? Do you mean that you can afford to buy a cheap property with no deposit but there are no cheap properties in your price range in Melbourne? if that's the case, you might have to consider buying in regional Victoria (in a town/city with a reasonable population and infrastructure).
Also in relation to your property in Sydney, what is it's value? This will impact on what the significance of $100K in equity is? if it's valued at $1M, then even with $100K equity you're probably at the limit. But if it's valued at $200K, then $100K equity is v.good.
In relation to the $50K personal debt it might be relevant to know what this is made up of. For example, if it's on 4 credit cards, the solution might be to consolidate through a personal loan or raise a LOC (against your Sydney property). it would not be tax-deductible, but it might allow for more favourable loan interest rates to improve your net cashflow and serviceability position.
There are quite a few MBs on this forum who might be able to assist if you provided a few more details.
The income is that 100k each or combined?
wanelad wrote:The income is that 100k each or combined?Combined
888Abundance wrote:darrenholmes68 wrote:I'm told i can buy a cheap property in Melbourne with no deposit but can't get a cheap investment property with no deposit.
Darren
I don't understand this part of your comment. Can you clarify? Do you mean that you can afford to buy a cheap property with no deposit but there are no cheap properties in your price range in Melbourne? if that's the case, you might have to consider buying in regional Victoria (in a town/city with a reasonable population and infrastructure).
Also in relation to your property in Sydney, what is it's value? This will impact on what the significance of $100K in equity is? if it's valued at $1M, then even with $100K equity you're probably at the limit. But if it's valued at $200K, then $100K equity is v.good.
In relation to the $50K personal debt it might be relevant to know what this is made up of. For example, if it's on 4 credit cards, the solution might be to consolidate through a personal loan or raise a LOC (against your Sydney property). it would not be tax-deductible, but it might allow for more favourable loan interest rates to improve your net cashflow and serviceability position.
There are quite a few MBs on this forum who might be able to assist if you provided a few more details.
We were told we could get a house and land package in outer north Melbourne to live in but not as an investment property, we never really persued the comment.
Dear Darren,
When taking out home loans always opt for interest only. It is critical to remember that when investing in property your buying time, not real estate. To explain, based on property doubling every 7 to 10 years, a property bought for $300,000 today will be worth between $900,000 to 1.2 Million at the end of 30 year loan. Whilst reducing the principle saves the amount of interest you pay over a 30 year period, it again places a limitation of the amount of properties that you can secure within the same time frame based on the extra commitment. In other words, most investors that have 5 or 10 properties would not be able to physically continue to buy any more if they were to pay interest and principle on all of their loans. By always opting for interest only loans you will be able to buy a lot more properties within the same time and thus earn a lot more in capital gain. This one simple concept could be difference between retiring comfortable and ending up as a self made millionaire.
Kind Regards,
Mark Leith
Property Advocate
Global Buyers Agent
http://www.buyersagent.com.au
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