[chappy1970Participant@chappy1970Join Date: 2011Post Count: 23]

October 20, 2011 - 3:48 am

Earlier this year I set about restructuring my existing loan i.e. P & I to I/O loan, applied and had approved two other seperate loans (facilitated by a broker) and stayed with the same lender. Purchased 1st IP in June, looking very closely at another property under a SMSF shortly
 
Was able to wrangle a 0.9% discount (off the std variable rate) for the life of the loans.

Was very happy with that

[chappy1970Participant@chappy1970Join Date: 2011Post Count: 23]

September 20, 2011 - 7:34 am

Thanks to all for the responses.

Having been an IT geek for years, I think I am finally ready to get my first MAC

[chappy1970Participant@chappy1970Join Date: 2011Post Count: 23]

July 28, 2011 - 5:21 am

Scott it’s on RE.com.au,

It’s only 5-6 years old(apartment) It certainly needs a good clean and fresh coat of paint, but we cannot get in to do those things before settlement. The vendor has allowed access during the settlement period to find a tennant.

so it probably isn’t being shown at it’s potential

[chappy1970Participant@chappy1970Join Date: 2011Post Count: 23]

July 27, 2011 - 9:45 am

Yes it’s on the web and has been for a couple of weeks, inner southern suburbs of Melbourne. Elwood, Elsternwick, Prahran area

[chappy1970Participant@chappy1970Join Date: 2011Post Count: 23]

July 18, 2011 - 1:07 am

Richard no need to be sorry, that is the exact reason I joined this forum, to get sound advice on the right structure. 

Looks like I need to have a new Savings account setup with a 100% offset facility against the PPOR loan.

Thanks for the setting me on the right path.

Chappy 

[chappy1970Participant@chappy1970Join Date: 2011Post Count: 23]

July 15, 2011 - 1:56 am

If i have my salary (and my wife's) go into the PPOR (IO loan with redraw) will this do the same? as it will reduce the interest on the loan and will still give me access to funds (via the redraw)?

[chappy1970Participant@chappy1970Join Date: 2011Post Count: 23]

July 7, 2011 - 7:10 am

Thanks Richard,
This is my first IP and after seeking advice from an expert, my wife and I recently converted our PPOR loan to IO.

Presently we have both mine and my wife’s salaries going into the PPOR IO loan.

We have a savings account, but this generally only holds a couple if hundred at any one time which is what we use for carry around cash I.e. Coffee, lunch occasionally, etc.

We purchase most things on the CC and take advantage of the 45 days interest free and pay it in full every month. We have been doin this for 10+ years, so we are very disciplined.

The PPOR loan is currently $195k of which $45k is there for the equivalent of redraw.

Chappy

[chappy1970Participant@chappy1970Join Date: 2011Post Count: 23]

June 9, 2011 - 11:55 pm

Terryw wrote:

I think the main effect may be a decrease in new properties being built as investors would be less inclined to invest in construction. However, most developers would not be negative gearing anyway so maybe this won't be effected.

Terry imagine the backlash from the building industry if this was to occur.

[chappy1970Participant@chappy1970Join Date: 2011Post Count: 23]

June 4, 2011 - 7:05 am

Richard is there a simple formula to use to work out what the monthly salary would be, incorporating interest from an IO loan of an investment property.

My wife and I are crunching the numbers at the moment to determine what our purchasing power is.

We have an Equity loan organised from my PPOR. The outstanding on the PPOR is $240K on a property recently valued at $1.25MM.

So the equity loan will be 100% of the purchase price.

Any advice and/or formula's I could apply would be great

Chris

[chappy1970Participant@chappy1970Join Date: 2011Post Count: 23]

May 25, 2011 - 12:25 am

EV,
What a concise and methodical approach you and your partner applied.

I'm trying to cram years 10-4 (year learning span) into a smaller time frame, my wife and I have had our kids (no more for us ).

We have considerable equity and now have the finance ready for the IP, I have received considerable advise on the correct way forward; r.e. structure and strategy, now to find the right opportunity.

Chris

[chappy1970Participant@chappy1970Join Date: 2011Post Count: 23]

May 24, 2011 - 11:23 pm

For clarity this statement

Secondly, I understand that the agent first and foremost represents the buyer, but part of that obligation is to engage with buyers who display a genuine interest in the property For Sale. In this instance I don't believe this occurred.

Should have read

Secondly, I understand that the agent first and foremost represents the vendor, but part of that obligation is to engage with buyers who display a genuine interest in the property For Sale. In this instance I don't believe this occurred.

Sorry for any confusion

[chappy1970Participant@chappy1970Join Date: 2011Post Count: 23]

May 24, 2011 - 1:47 am

Andrew whilst I see that you are in the industry I disagree with your comments.

Firstly my repeated requests to the agent to get a viewing of the property along with my numerous queries regarding the price were evidence enough that I was serious about buying the property. I have enough to do without wasting my time chasing the agent on something that I had little or no interest in.

Secondly, I understand that the agent first and foremost represents the buyer, but part of that obligation is to engage with buyers who display a genuine interest in the property For Sale. In this instance I don't believe this occurred.

As a follow up to this, my wife drove past the property on the weekend and the sign has been taken down.

Chappy

[chappy1970Participant@chappy1970Join Date: 2011Post Count: 23]

May 20, 2011 - 2:09 am

Appreciate all the great feedback.

We didn't think it was going to be a simple process, so we have learnt from it and have moved on.

[chappy1970Participant@chappy1970Join Date: 2011Post Count: 23]

May 19, 2011 - 8:33 am

Further to this, the other party finally go a viewing.

We promptly made an offer, this was taken back to the vendor by the REA.

The response was that the vendor was looking for considerably more.

The thing that puzzles me was that the item was listed as $XXX + and the Vendor wants 10% more than the advertised price.

I find this very unusual for a property that is listed as for sale.

Anyway we aren’t interested in the place attar vendors asking price, so onto the next opportunity for us.

Suffice to say I will never deal with the REA again not recommend them

Rant over
Chris

[chappy1970Participant@chappy1970Join Date: 2011Post Count: 23]

May 11, 2011 - 2:30 am

SandraL wrote:

Interest Only loans give you more flexibility. A lot of people don't understand this, but you can pay down the principal on a  I/O loan just as easily as on a Principal + Interest loan, but you don't have to, that is the big difference. If you have spare cash, you can make extra repayments, but it is entirely up to you. Whereas on a Principal + Interest loan, it is the bank who tells you how much of the principal you have to repay each month. That's why it's more flexible.

Sandra
Landlordschoice

http://www.landlordschoice.com.au
P : 1300 168 988

Property leasing and selling solutions for the DIY landlord!

Sandra,
Thank you for this post. It has explained a lot about my investment advisors suggestion around changing my PI loan to IO. My wife and I are in the process of trying to secure our first investment property. We made a smart decision 13 years ago on a property in Melbourne (our PPOR) and now have significant equity in it.

My wife is quite conservative financially, so having the flexibility to pay the IO amount as well as paying down the principle will give her piece of mind.

Thanks
Chris 

[chappy1970Participant@chappy1970Join Date: 2011Post Count: 23]

May 11, 2011 - 1:40 am

First post for me, so much great information on the forum, thanks to all.

Very much a novice investor, but have negaged experienced professionals to guide me through most of the pitfalls.

Looking to purchase my first investment property shortly and am looking into a SMSF later this year.

Very informative thread