All Topics / Help Needed! / What would you do in my situation?

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  • Profile photo of Nick5a1Nick5a1
    Member
    @nick5a1
    Join Date: 2009
    Post Count: 1
    September 8, 2009 - 3:57 am

    Hi all,

    I have some money saved up and would really like to invest it in property as I am about to do some extended traveling (a year or more) and would like that money to be invested in property rather than just sitting in an interest bearing account while I'm away.

    The specifics:

    • I'm 25, single, a FHB and live in Brisbane. Currently renting.
    • I have 250k after tax sitting in a Pty Ltd. 30% tax is already paid on this amount so I can distribute a dividend to myself of 80k pa without paying any extra tax.
    • I have no income. The 250k came from a successful business I started and ran for the last 2 years, but due to market factors outside of my control it is no longer viable and I am exiting the industry. I also want to go traveling after Christmas and so won't have any income which can service a mortgage.
    • I have another very minor income which will finance my travels, but there won't be any left over for servicing a mortgage.
    • I did get pre-approved for a home loan a couple months ago, up to a total value of 750k, with a 20% deposit.

    So essentially I am doing some extended travel, which could last for 1-2 years. I'd feel a lot better doing it knowing I had a piece of land that was mine and something to come back to, instead of just coming back to more expensive property prices in 1-2 years. Also, it seems silly to just leave 250k in an interest account.

    What would you do in my situation?

    Thanks very much for any advice at all. Any feedback whatsoever would be much appreciated.

    Thanks,
    Nick

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    September 8, 2009 - 5:17 am

    Hi Nick

    If you are unable to evidence your income then it sounds to me like the pre-approval you had was done on a lodoc basis.

    Not sure with whom the pre-approval was with but lodoc lending terms and conditions change fairly regularly at the moment.

    Assuming you decide to purchase a property prior to departure and that you are able to distribute the retained earnings to you individually over a period of time you might wish to look at establishing a 100% offset account so that the interest earned on the savings offsets the interest being charged whilst at the same time remains oncall and accessible.

    Richard Taylor | Australia's leading private lender

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