Hi everyone, I am looking for advice on purchasing 2nd IP. We purchase our properties through our SMSF. Our 1st property is positively geared. We are looking at property in regional NSW. We can afford 20% deposit. What are your thoughts on interest only finance. This property is already rented and will be positive geared also. Cheers And thanks Peter
Hi Peter,
Sounds like you need to share your tips on where you are finding these PG IP's?!
Interest only is great which is why a lot of people use St George for SMSF IO loans. They have a good product and of course a linked offset.
The only thing with St George is that you need a company guarantee for a 80% lend.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
I always go interest only. Put extra cash either into your PPOR if you have one or into an offset account.
That way YOU control your money (not the bank).
Just curios- How are you calculating CF? 80% purchase? 100%? 105%?
Different people calculate it differently. To me CF+ is taking into account interest on ALL purchase costs + outgoings.
Hi everyone,
CF+ created by potential tenants bidding for property to rent. due to shortage in the Hunter region. The tenants that are in the house bid $50.00 over the rent that we thought we would get. After all purchase costs, the tenants are actually paying the mortgage with a little left in reserve.
Peter
Hi Peter
We do a fair amount of SMSF lending and be suprised how many clients do realise just because the property is positively geared doesnt necessarily mean it will service on a SMSF calculator.
Also being a regional property you may find it is not an acceptable area for a 80% lend.
If you want to shoot me an email with the post code and town i can check the geographical location for you.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Awesome! Congrats on buying another investment property. You are on a roll !
hope you could bye the second propery…
New SMSF product released during the week where the lender has waived its application fees on its 80% lvr.
Makes the overall deal even more attractive.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I thought that SMSF loans could not be interest only. In that they by definition have to be P&I in order to satisfy the fundamental super criteria which is to increase equity and maximise the benefit for the members. (which interest only loans do not unless prices go up, which they don't always)
ie to minimise risk they have to be P&I. (Plus the fact that they are limited recourse loans means the banks do not want to fiddle around with anything that has slightly more risk)
.
Hi House Call
Hate to say that is incorrect.
The SISA legislation makes no comment about the type of loan one must take out.
Interest only is a popular loan type for investors who have limited funds in their SMSF and want to try and eak out a second purchase although i must admit i am very much one in the P & I corner for SMSF lending.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
….Hmmmmm… interesting. Thanks Richard.
A bunch of SMSF schemes just popped into my head that I didn't know were allowed to be in there….
Certainly House Call i agree it opens up so many more options about controlling your own financial future when you can buy and sell in your SMSF.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
SMSF and property work well, especially borrowing at 80% LVR IO with a 100% offset account. Positive gearing is even better. It won't be long before you save up the next 20% deposit in the offset for the next one.
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
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