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JacM raises a good point, I find a lot of clients try to balance out their property portfolio to be neutral overall during the accumulation phase, as they can make good use of the positive cash flow on their other investments by putting it to use with new investments. When the portfolio reaches critical mass they can sit back and let the cash flow rise each year, develop or even sell down after capital appreciation.
A nice situation to be in any case. :)
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Hi Dangermouse9, Looking at it from here, it has $46,000 of use-able equity in it. ($420,000 x 0.8 minus the debt = $46,000).
In most cases you can actually go to 90% than 80% on equity accesses, ie $88,000 available with the right structuring. :)
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Well you don’t see that every day. :P
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
No can do. They will still get the commission, and this is a little dodgy to say the least. The vendor has taken the agent to assist with the transaction, it's best to talk to them directly.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Were you told you've hit a serviceability wall by a lender or a broker? Generally even if one lender says you've maxed on your lending capacity, there will be capacity available with other lenders.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
You've mentioned the current IP's are tired and old, where are they located? Do they have development potential, perhaps you can turn the old properties into new (depreciable) properties.
I'm inclined to hold properties as switching costs in South Australia are quite high (stamp duty etc). When you multiply this over several properties and you find that you lose quite a sum of money to the govt.
I suggest looking at where you want to be, where you currently are and draw a line between this. See how you can achieve your goals (perhaps to generate a strong income for retirement/freehold PPOR etc) and then see which strategy can take you there as quickly, effectively and low risk as possible.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Some lenders won't allow you to continually apply for new IO terms, but generally you can just refinance the loan which will open up new IO terms.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Both will have to sign off on the docs but as mentioned the use of funds after that point is up to you.
Is this a spousal arrangement, or two separate individuals?
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Decent cash flow on car parks, I know one person who owns a couple in the CBD.
Personally I've only ever seen them advertising them in biz mags picked up in airports. Not where I generally pick up investments.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
This is just one more risk factor being plugged into the credit scoring matrixs. Consider the huge proportion of the population which pays their bills late (how many utility companies provide a discount on their rates if you pay ON TIME), makes me believe that they will not be targeting the applicants with a water bill a week late here and there, but serial offenders with other defaults listed. Each brush stroke adds to create the total picture in the end.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Buy a cheap van!
I bought a Long Wheelbase van a few years ago for my renovations and it can generally fit everything you need. If you get one with a towbar/roof racks you'll be laughing.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Huge interest in Brisbane and the real estate agents know it.
I have quite a few clients looking in the Bris market and the best word of advice is to be quick on your feet, you'll find properties are going under contract incredibly fast and for increasingly higher prices.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Some companies will also add new items to your depreciation schedule for free if you use their services. I know the one I use and refer clients to does. A nice little extra.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Quite happy to pay for a professional property manager. The key is finding one which can provide value to your investment portfolio, being proactive with maintenance and tenant requests, applying consistant pressure on rents as warranted. They are the gate keepers to your most value assets after all.
If you had the time and inclination self managing may be worth it, but I personally believe that I like to invest, not buy myself a lot of jobs.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Having two part time roles isn't a problem so much. Even if it's casual, so long as you meet certain requirements (been with the business 12+ months, consistant pay) most lenders won't kick up too much of a fuss.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
What LVR? 15 year term? Most lenders are doing high 5's to low 6's right now, features are becoming more of a competitive space.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
The other option is to work part time and take leave when renovating, so you can effectively spend your time wisely with getting each project done as quickly as possible. The key is balancing serviceability with your investment plan. If you go hard early and commit to each 100%, you will be able to take it easier much sooner.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Generally this isn't too much of a problem, the hits can be explained away and the lender will move forward from there.
The main issues come when theres multiple hits for credit cards, personal loans and the like, as opposed to property purchases which can be substantiated.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Generally most investors stay employed for a number of years to enable continued purchasing. This may open up other avenues such as development, renovating etc which can increase yields and capital gains. Of the number of property investors, I know of very very few who are effectively unemployed and investing, they either have invested for a decade +, or have established property based businesses which were built on a large cash base and extensive experience in the roles undertaken.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
As everyone else has warned, generally not the best investment. Restricted LVR's, more difficult to sell, limited capital growth, high body corp fees.
Because of those factors, that's generally why they are cheaper than normal apartment alternatives.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
