Hi all,
I am looking to invest around $200,000 for my first investment property. I am looking to get my feet wet in property investing and don't necessarily plan to keep my first property long so I am giving more consideration to yields rather than capital gains.
The Central Coast has caught my eye as a potential starting point for the following reasons:
– The Coastal lifestyle (desirable for an ageing population)
– 6 – 7% yields
– Proximity to the two largest cities in NSW
– Rail and F3 access to both said cities.
– Limited land available east of the F3.
– Proximity to coal operations (some of which have pending applications for expansion).
– Warnervale airport
– Proposed development: Wyong Employment Zone (Warnervale), Chinese Theme Park, Munmorah Power Station, Magenta Shores Tourist Facility, Kellogg's Factory
Please share your opinions!
The beaches are beautiful and I have always considered Wyong Council as very innovative and proactive.
^ you don't plan on keeping the property for long so your aiming for Yield rather than Capital growth????
With an 7% yield on a purchase price of $200,000 you would make $10-$20 p/w after expense generally speaking…not sure if that is a good "shot term strategy"…..personally rental yield strategy works for investors who is after an "hold and forgot" type investment and over a long period of time.
If your plan on holding your property for only 3-5 year, you BETTER hope it has good capital growth- because the cost to buy the investment (stamp duty, legal, set up etc) will surely eat into any profit you can potentially make if you don't receive a decent CG.
Well that's my thoughts anyway.
Regards
Michael
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Hi Michael,
Apologies for carrying this conversation over two forums haha. For everyone else's information; Regarding my circumstances, my partner and I are currently paying off a PPOR. We have built up some equity and we are looking to get into the investment game ASAP. I am therefore looking for an affordable property that has reasonable yields (to minimise ongoing outlay) and decent capital gain prospects over the next 5 – 10 years.
The reason I am interested in the CC market is outlined in my first post. I know the market has been flat on the CC for some years, but I am aware of some significant projects in the area that indicate increased employment opportunities and improved livability.
Michael, being a mortgage broker, how would you suggest I approach this with my bank (NAB)?
Paul B. wrote:Michael, being a mortgage broker, how would you suggest I approach this with my bank (NAB)?Don't! Use a broker to help you through the process.
Banks are more interested in mitigation of their risks – often this is detrimental to your goals. I suggest you give Michael a call.
Let them know you want to release some equity to invest into property – they will automatically ask you if you have found a place , as they would want to finance and lock you in for the 2nd mortgage as well
I'll provide you with a general run down that suits 70% of investors…however you should really obtain personalized advice rather than follow a generic general advice.
Baisc Steps
1. Valuation carried out
2. Equity release based on amount, LVR and valuation
3. Make sure they provide you with an SPLIT loan, meaning a "second" loan must be created and not just added on top of your PPOR!! ( important)
4. Also make sure they provide you with an 2nd 100% offset account so that the newly released funds can sit in this account without occurring any interest and also it keeps it separate from your PPOR offset ( also very important)
^ Sometimes you can skip step 3 and 4 by using an LOC. ( but this can come at a cost and it's not always suitable)
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Shape wrote:Let them know you want to release some equity to invest into property – they will automatically ask you if you have found a place , as they would want to finance and lock you in for the 2nd mortgage as wellI'll provide you with a general run down that suits 70% of investors…however you should really obtain personalized advice rather than follow a generic general advice.
Baisc Steps
1. Valuation carried out
2. Equity release based on amount, LVR and valuation
3. Make sure they provide you with an SPLIT loan, meaning a "second" loan must be created and not just added on top of your PPOR!! ( important)
4. Also make sure they provide you with an 2nd 100% offset account so that the newly released funds can sit in this account without occurring any interest and also it keeps it separate from your PPOR offset ( also very important)
^ Sometimes you can skip step 3 and 4 by using an LOC. ( but this can come at a cost and it's not always suitable)
Thanks Michael. I will ensure that a split loan is set up with a dedicated offset account. I would be looking at borrowing at 90% LVR. What are the (general) pros and cons of a standard loan compared to LOC considering my circumstances.
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