Hi All,
I have read numerous postings and am struggling to get in the game.
O/O – TRARALGON VIC ($440,000) owing $210,000. Equity = $230,000.
INVESTMENT – TRARALGON VIC ($280,000) owing $145,000. Equity = $135,000. (Problem is this is owned with a relative who wants out, therefore i have to pay him out ($55K) as i think it is a good investment.
Both full time employed, stable jobs $110,000 joint income.
What i want is some advice on obtaining further investment properties without breaking the bank and using the benefits we have such as equity in our properties. Just over 30 years old and want to set ourselves up. Looking in capital cities or even around home.
Your advice would be great. Look forward to hearing from you all.
Regards,
Andy
Andy, you appear to ahve a good income and reasonable equity in both of your properties. However, to be able to give you definitive advice there is a need to know what other liabilities a person has such as credit cards car loans, personal loans etc I would suggest you look for a post or reply by Richard taylor and Pm him with your more detailed inf. he is a wealth of knowledge and knows how to hep people structure their loans for maximum investment benefits.
I would imagine that you should be able to refinance the investment property to pay out your relative without actually needing to put in any of your own cash as you would still be well under an 80% lend on the current valuation. make sure that when you restructure that you get an Interest only loan.
As far as other investment properties go, work out what your strategy is buy and hol, buy low, renovate and sell etc. Then do your research for towns/cities that have good growth prospects/ a variety of employment etc. Don't feel that you have to be limited to your own home town, although this can make it easier to inspect the property and know whether it is a town that meets your criteria.
cheers
Sonya
I would suggest look at buying the relative out and then set up LOCs on one or both properties. Use these for deposits on the next IP purchase. Always keep a buffer of around 6 months to 12 months repayments available and borrow no more than 80%.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Andy,
If the numbers make sense then perhaps refinance the IP and payout your relative. The answer will depend on what capital growth is expected over the next 5 to 10 years and what the rent yield is. If the numbers show that you can can get better returns elsewhere, then consider selling. It will depend on CGT as well.As to long term investing, inner suburb capital cities generally perform better than the average market. I would look at the three East Coast cities of Melbourne, Sydney and Brisbane. However the type of property is sometimes more critical, what do you need to buy now to be able to fund and finance the next purchase. Too many investors ignore this and get caught in a mentality of negative gearing, inner suburb etc and then cannot move for some years when markets change, especially the finance markets.
Do you need better cash flow or income or tax benefits or lower funding amount to settle?
I don't know from your post what your particulars are to be able to suggest a better path. I am happy to look of you want to PM me.
Good luck
GregHi Andy
I am assuming both loans are standalone (and there is no cross guarantees) given the names on the Title are different.
I am with Terry i think initially I would be buying out your relative and then using setting up a Line of Credit on the balance of the equity to enable you to draw down the deposit and acqusition costs on your future investment properties.
You also have decent equity (subject to valuation) on your own PPOR so there is no reason why the same cant be done here.
Just factor into your numbers that there will be some additional stamp duty to pay when you purchase the balance of shares in the TRARALGON investment property.
Your mortgage broker should be able to provide you with some good options once he is aware of the full picture and your requirements.
Richard Taylor | Australia's leading private lender
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