Hi Guys
Been a little while since I posted but have been busy looking at the market over the past few months and in doing so, have got the itch to purchase my second IP.
Now, I am a little undecided on which path to go. As a reference, I currently have 2 bedder apartment in the Sydney CBD and my strategy is to hold onto these properties as long as possible using as little $$ (don't we all).
Path 1
Looking at RE.com, there are a number of relatively cheap older units in Western Sydney (e.g. Blacktown, Guildford etc) which are selling in the vicinity of $160-180k. These are pretty enticing considering some of them are rented out at $200~ which would make them relatively cheap to hold
Path 2
There are some units in the inner suburbs such as Chippendale which are selling in the vicinity of $300-350k. Obviously these cost more but they are also in more desirable suburbs.
I am now seeking advice on which path I should take? I know some of the more experienced investors would probably have experience in buying from these two areas. Things I want to know include how easy it is to resell these in the future and the vacancy rates etc. Is it worth buying two units out west as opposed to a newer unit in the inner suburbs.
Thanks alot
Eric
Being from Qld i can't comment on the areas but if it is anything like some of the cheaper suburbs in Brisbane these have the been ones that have risen in percentage terms better than some of the higher prices properties on what is considered a better suburb.
At the prices and rents you have mentioned the properties appear to be neutral or even positvely geared even at 100% gearing.
Why not look at borrowing 100% of the purchase price of each and acquire 2 of these as they will just about be self funding.
Richard Taylor | Australia's leading private lender
Thanks
I will probably try to get 100%. Just spoke to my current bank and they said due to financial crisis blah blah, they can only do 90% including LMI. Will speak to a MB to see what else is on offer. Just out of curiousity, what lenders still offer 100%?
ecl
have also been looking at Sydney West…Rams will do 100% for investment purchase (or 97% plus LMi) if you have 20% equity in your existing property, otherwise can do 95%+ lmi.
i think most lenders will look for the 20% equity in existing property for 100%.
if you want to consider Rams let me know
cheers
I think most lenders will look for the 20% equity in existing property for 100%.
No not all.
Richard Taylor | Australia's leading private lender
did i say ALL???
no
Or indeed most
Richard Taylor | Australia's leading private lender
If you can get a line of credit(not sure what your gearing is now?) going into the next IP(in the best location you can afford)
would be the best option in my opinion, just try not to cross collateralize the next IP with your existing( by means or credit line paying cash not using current equity different banks trusts etc…)
The inner suburbs are now showing neutral and the odd positively geared IP with the best opportunities for someone like your self that might be able to pay cash…..Best suburbs are the go, they hold or even still increase in a downturn….
Hope this was of some help.
Matt
ecl
Sounds like you are an Anz customer to me.
There maximum LVR is 90% inclusive of LMI. Plenty of other options out there.
Richard Taylor | Australia's leading private lender
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