Hi there,
I am new to the forum and currently looking at purchasing my first investment property in the northern suburbs of Brisbane. It is a house and land package for $420k. I currently have $60k in savings with no debt and limited expenses. I have a high paying job and am looking to purchase another 2 investment properties in the next 12 months. Over the next 10 years my goal is to replace my income through capital growth and positive geared properties. I am in my early 20's and in the next few years I plan on marrying and having my own family.
- What type of loan should I be looking at?
- Should I be buying in my own name? Should I be using a trust?
- Should I be using offset accounts?
- What is going to the most beneficial structure based on my situation and circumstances.
Thank you in advance.
Hi BLG
Welcome aboard.
It's difficult to provide a tailored response to your individual circumstances without knowing the full details of your situation but generally speaking:
– Interest only with an offset works well. It provides flexibility now and in the future. I'd also be looking to use a lender that enables future equity releases at relatively high LVRs without too much hassle.
– Can't really comment. Why do you feel that purchasing in a different entity will be suitable for you?
– I would. But only one is required. If you've got a main residence place it against that loan. If you don't then set one up against your next loan.
– Point one touches on this. If you're wanting to purchase multiple properties in a short period of time that you'll need to use lenders that are conducive to this. Access to future equity is important here.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi BLG
As Jamie mentioned welcome to the forum and I hope you enjoy your time with us.
I agree that normally an offset account is recommended where you have surplus funds and assuming you have no PPOR loan.
In saying this makes sure that you don't end paying more for the loan by way of monthly fees, charges or a higher interest rate only to find out that the benefit you get back is reduced due to the dwindling cash left over after the settlement.
As the property is going to be an investment property there will be no Stamp Duty concession so you will be paying full duty on the purchase price and that together with the deposit will consume a reasonable amount of your savings.
I would have perhaps looked a bit further afield and worked backwards. Think how much you need by way of deposit and acquisition costs to buy the 2 IP's you want to acquire in the next 12 months and then see what sort of loan you probably need for this property.
There are a few little niche products which are worth considering if you are ongoing income but have limited deposit savings.
Remember the chances of being able to draw equity out of the property being a new house and land is going to fairly limited over the first few years so you don't want to find you have used all of your savings on the first deal and have to sit on the side lines for a few years because you have got sufficient amount to cover future deposits / costs for further Ip's.
Getting it right now will set you up well for the future.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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