HI Guys,
I am new here and not sure the easiest way to provide you guys full detailed. so i broke it down in 3 parts
Part I
- Currently have block of land that i purchased for $280K – 20% Deposit in 2011
- I have had Land approved for Duplex (dual occ) now. I belive that increases value of the land
- I have seen similar sort of land in my area going upwards of $480K
- Been quoted by real estate agent that i may get between $420- $500k for block of land if i sell
- i would like to keep block of land (if possible)
- I haven't organze re valuation as yet.
Part 2
- I am on 52K + super salary
- No other exisiting debt other than 220K loan for above property
- No Credit card
- I dont pay rent
Part 3
- I would like to find out that how can i buy my next property using equity available in current land
- if i can do above, can i buy a proeprty worth around $450k with rental income of lets say $400 per week?
- i have around $20K cash
Thanks for help in advance.
Thanks Tom.
What would be the amount i can borrow?
Hi MBuilding
Firstly welcome to the forum and I hope you enjoy your time with us.
Have to disagree with Tom on this one as whilst nothing is for certain i don't think you are a million miles away of being able to go to a loan amount of $450K.
Course would depend on how we structured the loan and what you end up purchasing but assuming a standard yield i believe with a little tweeking it could be achieved.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Real estate agents usually exaggerate, so knock off 10% on what they have quoted and that may give you an idea of the value.
ALso keep in mind this is the sub-divided value whereas you have one block at this stage.
Without looking at serviceability you could get up to 80 or maybe 90% of the value of the existing block, before sub-division. From this deduct you existing loan. This would be the amount of equity you could access to use as deposits.
For the new purchase you would then go and get a 80 or 90% lend with another (or same) lender.
Servicing may be tight as no income is coming from the land and you may be assessed as paying nominal rent depending on your circumstances.
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
Hi mbuilding,
First off the land with DA might increase the sale price to someone looking to purchase but it won't have an effect on what the lender will value at. They will look at the value of the land on its own. It however still seems you have enough room in there to use as equity.
So yes, you are able to use the equity in the land for say a 20% deposit and costs (stamp duty, etc) for an investment property purchase.
However with your salary, despite having no other debts and no rent payments, it seems that you will have serviceability issues with a $450K purchase. Will be a bit high.
Cheers
Tom
mbuilding, from my quick calcs, I would have a purchase price around the $420K mark in mind, with 20% deposit plus approximate costs of around $20K coming out of the equity from the land loan, the remainder being a standalone loan.
However if Richard thinks that $450K is achievable, then it most likely is.
I suggest you contact him. His reputation on this forum is held in high regard.
Cheers
Tom
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