Hello all,
My partner and I are looking at buying our 3rd property in Brisbane as we are looking at moving there within the next 12 months. We currently have two properties, one in Sydney ( loan of 380k, worth approx. $530k) which is rented at $510 pw. We live in our current property in WA (loan of $380K, worth approx. $410K), which when we move will be rented at approx. $370-$400 pw
We have a combined income of around $175K. We are looking at buying a property for around 400K in Brisbane, but when we did the figures found out that it is well out of our reach, even with both investment properties rented out we would not be able to afford to do this. Currently both loans are P&I loans, and even with changing this to interest only loans we still would not be able to afford a 3rd property. Even if we reduced the amount we spend in Brisbane to 300K it would still be a HUGE struggle.
How do people accumulate 5-10 properties?? We are both on decent salaries, no kids, no credit card debt, and we feel as though 2 properties are all we can manage!Any suggestions would be appreciated.
I can't work out why you cant buy more.I have 4 IP's worth around 3 mil (loans 2.3) and am a bus driver.We were earning around 150k for a year or two with my wife but mostly under 100k combined for most of the last 5-10 years.
You may need to see a better mortgage broker as this seems very strange. I would love to have your income as I know I could definately buy more according to my broker
I am with Shane i am unsure why you feel you could not afford it.
I appreciate that we only have a small amount of information but certainly from a servicing point of view you would appear to qualify.
Richard Taylor | Australia's leading private lender
Thanks for the input Shane, Richard. I may have to re run the figures or sit down with a mortgage broker and discuss further. Thanks again!
Bazza,
You have to remember that someone who has 10 properties did not buy them overnight. It may have taken a number of years to achieve this. In this time rents will go up so the first few properties you bought may now be well and truly positively geared so this money can be put towards repayments of other properties that are negative or neutral.Investors with large portfolio may also have a LOC or similar set up to assist with covering mortgage costs and other associated costs.
If you pay alot of tax you may find that you subsequently recieve more tax back if the property is negatively geared. This money can then be put towards property costs throughout the financial year. You may even look at doing a tax variation.
Congratulation!!!
I believe you are well set up to increase your asset base .
You are showing strong income (personal and rental) and you already have built up some equity over the years.
I have no doubt by the information you provided you would soon purchase your next house.I believe that by Increasing your Cash flow ( I.O.Loan/depreciation schedule and Payg variation) it would help growth your wealth and your relationship with a good broker.
You might want to consider borrowing over than 80%, I don't personally mind paying LMI if I can get the fund I want.
Your LMI rate can quickly be "paid back" by entering a better suburb or better investment deal.And also Take the step to look at structures before purchasing( trusts), if One of you is earning a fair bit less than the other then you can maximise some sweet tax benefits.
Again, get the knowledge,read,google and surround yourself by professionals and like minded people .
Good luck
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