Dear All,
I am in need of some advice. As I’ve mentioned previously, I am a 20yr old university student looking to get into property investment as quickly as I can. Currently, I have money in a First Home Saver Account which unfortunately I will not have access to until mid 2013. This money will be used to fund worst case, my first property investment (live in 6 months then rent out) capitalising on the FHOG. My girlfriend and I will combine our accounts and have a minimum of 50k capital.
I graduate at the end of the year and will be looking to get a job as a recruitment consultant working on 45-50k base, plus commissions etc. Should all go to plan, I am hoping to entice my father to take out some equity on his PPOR (Purchase price 325k, current value approx 850) to buy a studio in Sydney for approx 250-300k max. It would be under his name, be rented out, I would just cover the difference in repayments. I also intend to repay him the full value of the deposit in the initial 2 yrs following purchase (i..e before my money becomes available). Is this feasible?
If I have already bought my own property (from my own savings), can the studio be transferred into my name once I have repaid him the full value of the deposit?
Any advice is greatly appreciated.
Regards.
Morning SF,my eldest son has similar ideas to you and i congratulate you on your plans.One of the more experienced forumites may be able to help you with the structure finance set up with your Dad.I will be helping my son with some equity .Re FHSA which we've just opened.You can do it in 2yrs 2wks ie min $1000 3rd wk jun2010.reg savings plan jul2010-jun2011.min$1000.same jul2011-jun2012.then deposit min $1000 in jul 2012 and you canwithdraw it with FHOG to purchase your 1st home.Also some changes made in fed budget;if circumstances change the savings can go into a mortgage which is in your name not your super and as you said must live in for 6mths PPOR then rent IP.Good luck Al PS was told it is messy and costly to change title deed names and try to buy a 2brm studio not 1 better capital gain and resale
Getting finance on a studio, or on a property that is under a certain size, can be challenging. Start chatting to the bank about this to understand the parameters you have to work in. Additionally if finance is offered, you might find it won't be as high as 90% LVR (ie 90% of the purchase price).
In terms of capital growth, it'd be better to get an apartment with at least one if not two bedrooms, rather than a studio apartment.
Remember if you transfer a property into another name, you may have to pay stamp duty (AGAIN, after having paid it on the initial purchase). As such, I think it would be better if your father loaned you money directly (in the amount of the deposit required plus stamp duty if needed), and then you get a loan with the bank yourself, and put the property in your name from day 1.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
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