Hi Guys, I have been following this site for over the past 4 yrs and have tried buying an IP twice but because of personal circumstances had to drop the idea…
Well finally got maried 2 yrs ago and moved into my PPOR a few months back. Had an valuation done last week and have already built 65K equity in my PPOR. However when i bought it i took a 95% loan from the bank but not because of the equity built up i can refinance at 85%.
My partner and i earn over 130K, have a 21K personal loan with no other debts and to be true my passion of owning an IP, benefit from negative gearing and start my portfolio is a burning desire in me. Could you advise whether its a good time to buy an IP?
Is it s wise decision to buy an IP even if it negative geared but spend a few hundred dollars from your monthly salary to make for the shortfall of the mortgage and claim that from your tax?
your help will be highely appreciated.
if you can afford it, i would say yes, especially if you are willing to keep your property for the next 5 years while waiting for the price to go up.
try to find a property that gives you rental guarantee, usually apartments are giving that option for about 2 years.
also, this is just my opinion, if you can find a property that is off-the-plan and give you rental guarantee, its pretty gud, coz that means you can arrange your cash flow until the property is done, and when it is complete they still give you a rental guarantee,say for example 2 years.
so, say you invest now and the property is to be completed in the next 2 years, that means you have 4 years time (2 years rental guarantee) to hopefully get a capital gain increase.and for the first 2 years you only pay the deposit ammount, and the other 2 years is just to cover the different of the loan and the rent which is usually about $400-$500 a month.gud cash flow
Thanks Xynergy! The idea of off the plan inv suerly sounds good….. i dont think i could go for the appartment option as from what i have heard the bank wouldnt lend me much for the appartments.. i.e. i would be required to put atleast 20% deposit…
It really depends on your investment goals / objective as to whether negative gearing is a good choice.
Before you start looking at places, make sure your objective is clearly defined (owning an IP is a goal, yes, but WHY do you want to own one? What is it a means to? Is property the best way of achieving it?) and that you have the correct legal structures in place (What would be the effect on your tax if you put it in both names? or just in one name?) Investment is 90% research and preparation (including talking to financial advisors, accountants etc) and 10% purchasing, not the other way around.
For mine, now is not the time to be negative gearing with high LVRs unless you pick your location VERY carefully. But then, my objective is passive income, not tax minimisation…
RE the apartment thing, it generally depends on the size of the apartment you are purchasing, not the fact that it is an apartment per se.
Hey Imugli, thanks for your advise. I agree " inv is 90% resaerch and 10% buying'…
My aim to own ip' is capital growth so that in a few yrs i can sell them, have a lot of cash, pay off my PPOR and perhaps start my own business….
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