- Hi All,Hope you have had a positive start to the year.I need some advice here is my situation:1) One property: Rental Income: $265 a week Loan Repayments per week: $250 Property purhcased for: 185k (3 Years ago) Current Market Price: 260k2) Just bought another property: New loan 270k, Repayments per month: 1700,Current market price: 290k. Pontential Rental income: 280 a week.I am 24 years old and i have just (Fast learner) that i have achevied alot at such a young age.I earn 50K a year at the moment which is about 800 dollar a week.The second house i like is a house that i might consider moving into at a later stage. I have no other debts.what would you do if u where me?
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
Hi Johann22,
Perhaps you should consider where you are going with your investments before you ask what you should be buying.
Cheers
Hi John
whats the issue ?? what do you see as your options
regards Kevin
I would look at the loans. The interest on the first one seems a bit high – is it PI or IO? I would change all loans to interest only and save the extra in an offset account.
You may have cross collateralised the loans. Try to avoid this if possible as it will create problems in the future.
Just sit tight, try to get the rents up as high as possible and make sure you are claiming everything you can (eg depreciation). Put all money into your offset so you can save interest. When you have enough for the next property, reassess then – it may be wise to pay the money into the loan of the property you want to live in and then reborrow it for the new investment.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
hey all,
First time on the forum. i have bought my first investment property and like everyone else in here would like to establish a healthy port-folio.
just a couple of questions:is it still possible to create equity quickly if it is a "interest only" loan?
and
would anyone know if there is a fee for changing a fixed loan to interest only if that is the better option.would appreciate feedback as i am just starting off in the investment game.
thanks
Roy,
There are basically two ways to create equity – that is, repay the principle on the loan, or create more value in the property itself, either by renovating or allowing the housing market to improve, which at the present time isn't happening much at all.
And yes, you should expect a fee for switching to variable interest rates (if that's what you're asking).
Cheers
thanks for the info. much appreciaed.
think i will continue to pay the principal which would make it a shorter time before i can purchase IP number 2.thanks
Roy
Why not use a 100% offset – which makes things less complicated with tax if you need some of your money back but give you the same result.
And if you have a loan that is non-deductible, why not pay that first – otherwise you are paying more tax.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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