Using personal loans to secure studio apartments

There are at least 3 lenders that don't have an employment duration policy. Tackle that option first before venturing into personal loans. 

Personal loans can work but they also do hurt your application strength. Again re-visit the possibility of your mate getting a loan.

Regards

Shahin

Is a 3 month wait really that bad? 

Wait – are these good investments? What is the return after expenses. Would you be better off  putting your money in the bank?

What is the CG or loss potential? Think of the opportunity cost. tying up your money. Could you use a SMSF?

Think about other entities lending you the money too.

My suggestion…

Borrow a couple of good novels from the library to pass the time for the next 3 months.  Borrowing books from the library is free.  At the same time, it will give you something to do so you don't go out on the town and spend money.  Save save save.  In 3 months time, look at buying something that is actually worth buying.

I agree with Jacqui

Studio apartments are a bad investment if they are in Cairns then they are a bad investment in a bad area. Whoever is recommending them I am sure is making a big commission. I think you would be throwing your money away. The market is at the bottom it will take time but there is no need to rush. 

Hi Dark Knight

Have I understood correctly… you are prepared to put two hundred thousand of your chips on the board for a return of only $33 a week?  That is a return of less than 1% per year.  (33 x 52 / 200,000) * 100  = 0.8%.

You would be substantially better off simply putting your money in a term deposit or high interest bearing bank account, if your aim is cash flow.

Alternatively you could split your $200k into three piles, buy three houses (with say an 80% bank loan) that are cash flow neutral or thereabouts in year 1.  In year 2, whack the rent up say $20 each per week.  That's a $60 per week return.  Already better yield than the studio apartment.  In year 3 what do you do?  That's right, you put the rent up again.  And so your yield goes up.  This is just a glimpse of the cashflow side of the argument.  Not even bothering to look at the capital growth situation or the re-saleability of the dwellings (you can resell houses to investors or proud home owners that are foolish enough to overpay because they just love the place.  A studio, you can pretty much only sell to hard-nosed investors who are never interested in overpaying).

Definitely don't mean to offend with my points… just to be blunt enough to get you thinking outside the current frame of thought and consider the other options

Could be wrong but I am pretty sure the apartment is only $40k and using 20k of his own money?

I would not recommend you to invest in studio apartments. I doubt you will get a good cash flow from this investment and studio apartments usually do not go up in price due to low interest in this kind of rental. Did you consider investing your money in houses? 2-3 bedroom house would generate better cash flow.

Thats still $120,000 for no growth and a low return. We develop property for investing that sort of money you would make $36,000 without having your money tied up in a second rate investment. Or use the $120,000 and then the $36,000 to buy a property to renovate or just buy a high growth property. The over $150,000 that is going to make the property you buy either positive cash flow or at least revenue neutral and have solid growth.

You need to think outside the square, if you tie up all your money in something without growth you also have to consider the.opportunity cost. In other words if a great deal comes up you have all your recourses tied up in three duds.