Hi,
I'm hoping a few of you will be able to assist me in planning my first investment property.
An outline of my situation:
Just moved into our first home and have a current mortgage of $295,000. We are paying off $900 p/fn.
Our joint income is $130,000pa.I have just received $40,000 from a bequest. I would like to invest in property.
My questions:
1. Am I in a strong position to buy an investment property?
2. Is it possible to find a property so the rental yield will cover the new mortgage? I'm thinking of buying something for $150,000 and renting it for $150p/wk in regional Victoria.
3. Will my current home offer some assistance when applying for a new loan?
4. What type of loan should I look for?
5. What is your general advice when looking for an investment property?Thanks in advance.
Hi Mark
Welcome to the forum and I hope you enjoy time with us.
Some answer to your questions:
1. Am I in a strong position to buy an investment property?
A) Certainly you appear to be able to service the potential debt. What is the current value of your property?
2. Is it possible to find a property so the rental yield will cover the new mortgage? I'm thinking of buying something for $150,000 and renting it for $150p/wk in regional Victoria.
A)Buying a property for $150,000 and receiving $150 week rent gross will not quiet self service but you wont be too far away. Depending on the post code and locality of the property may have a bearing on the maximum lvr.3. Will my current home offer some assistance when applying for a new loan?
A) This all depends on the current value of the property.
4. What type of loan should I look for?
A) An interest only loan would normally be suggested especially where you have other non deductible debt.
How you structure the loan will be parramount to maximise the Tax deductible interest yet still keep the loan separate to your current home.Ideally you would want to pay down your current PPOR loan by $40K and then arrange a $40,000 sub account to you can utilise these funds for the new deposit etc and the interest on both this loan and the new investment loan will be tax deductible.
Your mortgage broker should be able to give you some options.
Richard Taylor | Australia's leading private lender
Thanks for your assistance Richard.
Value of current property is $340,000.
Ok assuming the Bank value the property at $340K you should be fine.
Just make sure your mortgage broker or banker splits the loans after the capital reduction.
Richard Taylor | Australia's leading private lender
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