Hi guys, a bit of newbie here but we all start somewhere.
I brought my first property a yr ago for 560k in Richmond, Vic. 2 bed, 2 bath apartment. I have just changed my mortgage to IO. I have 510k owing on my mortgage and have 40k in my offset account. I’m wanting to buy another property now, not sure weather to buy an apartment or house as I now have an 8week old first child, and not sure weather or not to rent out my apartment($550p.w) and move into the potential new property, or stay where I am as I do love Richmond, OR rent out both property’s and rent somewhere myself.
Also I’m not sure on where/what to buy and how much to spend, I don’t want to be in over my head so maybe two mortgages over 500k may be a little excessive but maybe it won’t be, im looking for some guidance and wanting a bit of advise as to how you would go about securing your next property, do I use the money in my offset account as a deposit? Or can I use the equity in my apartment? And if I use the equity in my apartment does that mean my IO loan will be for say 560k if I use 50k equity?
I’m not sure who to talk to about this, I’ve tried family but they arn’t investors and not really the type to get out of there comfort zones to invest either, so my only hope of finding answers are you guys.
I look forward to hearing from you and I really appreciate your time in reading this eve if you don’t have any advise/answers for me.
Cheers, John
Hi John
Congrats on your first child :-)
It’s unlikely you’ll be able to purchase something for $500k+ at the moment due to the lack of a suitable deposit.
Your current home is already sitting at an LVR of 91% (unless it’s gone up in value a fair bit since a year ago) and $40k isn’t quite enough to fund the deposit/costs on a $500k+ purchase in VIC.
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]
The great thing is that you’re thinking about how to do it and seking advice before you take the next step.
You’d be best off to seek out a mortgage broker to get an opnion as to any borrowing power.What you buy is dependent upon what goals you have. The property is only a vehicle to get you to where you want to go.
Do you want chunks of gain or slow and setady cashflow? That’s for you to decide.Cheers,
Dwight
Dwight
Cashflow Positive Investor
Thanks Jamie M and BigVman.
Jamie thanks for clearing the equity part up for me. I currently have 40k, next month I will have 50k, the month after I will have 60k. My salary for the next year and a bit at least will be just over 200k but it won’t be that forever unfortunately, so my goal is to try and get a head start while I can and then once I decide to leave this job at the end of next year so I can be home with my new family I want to be able to have at least 2 property’s, 1 of them at least being an IP and the big thing is making sure they are serviceable when I drop back down to around the 100k a year salary.
I’m just a bit confused on taking the next step to secure another property, where should I buy, what should I buy, how much do I spend, should I touch the money in my current offset to use for a deposit or leave it and start saving from scratch again for another deposit. It’s a tad dawnting for a newbie and I feel as I did when I had my first boy a few weeks ago, the similarity’s are that both my newborn son and how I go about purchasing a second property don’t come with a manual ;)
I’m not a mortgage expert, there are others much more qualified who might give some specific advice.
I have however found myself in the past in a situation where I wanted to take advantage of my ‘current’ good income and debt serviceability.
I decided to target positive cashflow and planned to hold long term. With that in mind I borrowed as much as I could from the bank and set up a long term P&I loan. My reasoning was set and forget. As long as I kept up the payments there would be little pushback from the lender.My circumstances might change in the future, but for now this strategy is paying off and I have properties more than covering the repayments so all is well.That’s just what I did and why. You need your own why, your own goal and get some professional advice along the way.
Best of luck,
Dwight.
Dwight
Cashflow Positive Investor
It’s a tad dawnting for a newbie and I feel as I did when I had my first boy a few weeks ago, the similarity’s are that both my newborn son and how I go about purchasing a second property don’t come with a manual ;)
Buying property is easy peasy compared to raising kids :-) You’re in for a ride.
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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