Hi All,
I have been looking at investing for my first property in Perth. I had look at few suburbs in Perth but I am rethinking my strategy and need your help.
I have approx 150k deposit saved, currently renting. Earning is well(above 100k before tax) and will be able to cope up with some -ve gearing. My plan was to buy a house around 500k-550k and use all deposit to create neutral cash flow. I am looking for balance between rental yield and capital growth with capital growth as ultimate aim.
Should I buy a unit around 400k-450k and put 100k deposit and buy second property sooner or should I use all my deposit in first property and try to make it neutral?
Should I be paying capital + interest in loan for while until neutral and then start saving for second property?
Thanks for your advice.
AVSHi AVS
It all comes down to your overall plan.
If you’re looking to be aggressive with property investing than I’d be looking at spreading that deposit across multiple IPs and copping a bit of tax deductible LMI.
Interest only with an offset (just one offset against one loan is usually required) is the norm. There are certain circumstances where P&I can be a better option – and that’s usually when the borrower isn’t disciplined with money.
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]
Jamie is right AVS.
A lot gets down to your own personality and how aggressive an investor you are. You’re clearly coming from a position of strength.
They key is not to put your money where you can’t get at it again when you want it. I personally like to put my money in on offset account so I retain control over it and put in as little deposit as I can get away with. This allows me greater flexibility down the track.I also prefer long term P&I loans, because this suits the personality of my wife! It all depends on the mix of your circumstances.
Cheers,
Dwight
Dwight
Cashflow Positive Investor
Thanks guys.
I agree, it make sense to keep extra fund in offset account then to pay the capital.
My overall plan is to have a combined portfolio, mostly focused on capital growth but some on negative and cash flow. Capital growth is the preferred option to start with so build my portfolio.
Do you guys think unit\villa would be better option to start with and save fund in offset account for second property which could be house in different city?
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