Hi,
I am in the process of buying an investment property that is valued at 480k for 400k as I am buying it from a family member. This will be my first purchase of property and I also have approximately 70k cash in the bank. The property will still be negatively geared once I buy it but will obviously have equity in it straight away. Should I use the my cash to lower the loan to make it positively geared in the near future or hold onto majority of my cash and use the equity eventually to buy something else when I am ready. Is there anything else I should be looking out for?
Thanks,
Anthony
Anthony firstly would be keeping your cash in an offset account so this gives you flexibility going forward.
If it is a favourable purchase you maybe able to borrow against the valuation rather than the purchase price but you need to bear in mind that the Seller may have to pay CGT based on the true value and not the discounted price. If this is the case they may ask you to contribute towards this.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Suss out the favorable purchase option.
I recently done this for a forum client and was able to tap into a fair bit of extra equity for them as the lender went off the valuation rather than the purchase price.
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]
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