Hi guys,
I'm new to this forum and looking for some advice regarding the best vehicle and structure for my investment.
At present i am 24 year old Australian citizen although I only moved to live in Sydney from the uk 1.5 years ago.
I have been working full time for the past 6'months as a restaurant manager currently earning around 46000 before tax and super
I have no savings but I have $120,000 gift,from a family member to use a deposit or invest.
I'm also studying full time in sydney. (B bus and hotel management)
As I am not sure i have the earning history to get a mortgage I was thinking of buying some where out right for perhaps 200-250k ( will invest with a family member) and then put the rent into a savings account to add to my Income. My concern with doing this was that the banks will only take half of the rental income but will assess the entire debt. So would a trust or company be a better vehicle in terms of gaining future approval for mortgage.
Alternatively would I have any chance of getting a mortgage with my present situation for the extra 100-150k? For an investment property?
This is just an option I was considering but am open to any form – just looking to make a start and get on the ladder
Anyway I I'm new to the forum and wanted to get some advice on my situation and any other feedback and criticism, other options would be much appreciated.
Thanks in advance
Nick
1. Determine whether its a good idea to buy with a family member or whether its best to buy yourself only
2. Pick an IP strategy (or two). Is the plan to buy and hold? Subdivide? Development, Cashflow? CG? etc
3. Determine what your borrowing capacity is. You have a huge deposit so this will not be an issue. Having said that you need to plan for the future and that includes assessing whether its a good idea to use all of the deposit or some of it.
4. Note what the longer term IP strategy is and ensure that whatever lender you go with is suited not only for what you want to do today but also what you want to do down the track.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Hi Nick
Welcome to the forum mate and hope you enjoy your time with us.
Always good to see a few more poms on the site to balance out the numbers. (Bournemouth boy here).
Your income and length of employment are not necessarily a problem and the potential joint and severable liability issues when buying with a relative can be overcome with the right lender.
Would need a wee bit more information before advising further.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
That's an excellent gift and great family member you have
Probably a good idea to cast the net wide to begin with in terms of looking for ideas for you strategy as there's many ways to start climbing the ladder.
There is a 4 point sequence that any lending institution is going to be looking at to assess your possiblities to borrow.
(1) Assets
(2) Residual Income
(3) Ongoing Support Income
(4) Payments and Loan Support Credit History.
Now people think i'm nuts when I have asked them to take out a small credit card and run it up with a small payment .. but as far as the lending institutions go .. that actually completes Number 4 ! What the banks are looking for is someone who is serious about paying back their money. And a Credit Card actually does that !
Assets is anything you have that the bank is prepared to lend on. Ask an accountant what qualifies as an Asset.
Residual income is the stuff which comes in and complements your Ongoing Support Income. This can be through fully franked share dividends, carspace rental, housing rental or any other source of income thats passive in its accrual.
Ongoing Support Income is regular income you get that either requires you to work for it or comply with requirements. Now this does not have to be a job ! .. it just needs to be an ongoing and consistant incoming payment for the banks or lending institutions to take notice.
To start your accreditation in these categories .. change your circumstances so you qualify better in any or all of these categories. And you will find the banks sit up and take notice of you.
LDNNW1 wrote:Hi guys,I'm new to this forum and looking for some advice regarding the best vehicle and structure for my investment.
At present i am 24 year old Australian citizen although I only moved to live in Sydney from the uk 1.5 years ago.
I have been working full time for the past 6'months as a restaurant manager currently earning around 46000 before tax and super
I have no savings but I have $120,000 gift,from a family member to use a deposit or invest.
I'm also studying full time in sydney. (B bus and hotel management)
As I am not sure i have the earning history to get a mortgage I was thinking of buying some where out right for perhaps 200-250k ( will invest with a family member) and then put the rent into a savings account to add to my Income. My concern with doing this was that the banks will only take half of the rental income but will assess the entire debt. So would a trust or company be a better vehicle in terms of gaining future approval for mortgage.
Alternatively would I have any chance of getting a mortgage with my present situation for the extra 100-150k? For an investment property?
This is just an option I was considering but am open to any form – just looking to make a start and get on the ladder
Anyway I I'm new to the forum and wanted to get some advice on my situation and any other feedback and criticism, other options would be much appreciated.
Thanks in advance
Nick
Seek legal advice on that gift – first thing to do.
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 Nick,
Congrats for your gift, this opens up a lot of possibilities for you. It’s going to be exciting, but finding the right path implies hard work. Regarding mortgage, it’s mandatory that you find an experienced financial and loan adviser, in order to reach maximum potential of your income.
As a rookie investor, you need to do a lot of research and ask for the advice of more experienced investors. The constant house price increase can bring you important capital gains, but investment must be made wisely. I suggest boom towns and hotspots, because the demand for rent is high and the gearing conditions are positive.
Cheers,
Emil
Sunbuild Invest
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