Forum Replies Created
And to afford the occasional good one themselves – they need to do a good job and help their clients buy suitable properties for a long while to build up their income/savings. ;)
You can always assume the worst in society – but we didn’t get this far as a people without people doing the right thing for the most part.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Always be careful opening up random excel sheets etc from sources that you don’t know about either. Not saying this file is necessarily dodgy, but it’s good practice to be careful with these types of docs.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
It looks like your existing properties are slightly below 80% LVR. How are you paying for the deposit for the new purchase? If you’re looking at releasing equity it will be dependent on the current lender whether they will allow this as there has been a large number now denying the ability to release equity above 80% LVR.
Based on this scenario the balance would be to work out:
*how you are paying for the deposit on the new property – if via equity whether the existing lender will allow this, or do you need to go to another lender
*is the existing structure appropriate – if any changes need to be done whether this might need to be done before you buy IP3 and potentially then run out servicing/ability to make any changes
*whether IP3 needs to be with another lender, or the same (borrowing capacity, cost considerations etc)I wouldn’t necessarily split the loans up as 1 property/loan per lender as this is overkill and is generally a novices understanding of risk mitigation. Definitely avoid cross collateralisation like the plague, but you can still build a good initial portfolio putting more than one loan with the one lender should it be structured correctly to fit your needs not the bank.
Good luck, getting the right a lot of the time is in being able to trust your adviser.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
350k budget in Melbourne? I’d still be aiming for a freestanding house – which would for the most part limit the options to the outer Western suburbs/Geelong. These areas are seeing huge interest for this very reason – affordability. I wouldn’t touch any apartments with a 10 foot pole even though there are plenty of options in that price range – the supply issues with apartments are increasing by the day and making the likelihood of meaningful capital appreciation to be low.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
I think you’re over thinking it a little bit. It’s all fairly simple – just look at what properties are on the market/recent sales and compare any property you’re considering against those. Yes you’ll have to factor in the minor differences of the factors, but this is relatively minor.
If you try to come up with some abstract ‘intrinsic value’ for a property – you’ll probably find you’ve spent too much time, came out with an inaccurate figure and when you offer it to the agent you will get knocked back.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
An average yield for a commercial property in a suburb isn’t exactly going to be accurate – rental averages will vary widely dependent on type of property, size etc.
Commercial property is benchmarked on $/sqm – if you look at the listings available this should give you a good indication. Likewise speaking with a commercial property manager they should give you some numbers.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
You’ll find a lot of these figures will be able to still be accessed from most property data sources like Pricefinder, though not to the same degree as residential property. Otherwise RPData/Corelogic.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
I’ve seen this done by a few agents already using Facebook live stream etc. Fairly simple and it would give a huge benefit to those having to bid remotely via a proxy bidder.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Draw out all available to 80% LVR and then store the funds so nil interest charge until used.
Then for the subsequent purchase purchase at whatever the most appropriate LVR (80%, 88%+LMI) etc and then you’re set.
It’s best to draw out the equity while you can, as serviceability decreases with each purchase you may otherwise find yourself with equity you cannot draw out and then you’re stuck.
Likewise lender regulatory risk is a real thing with the significant policy changes ever coming through. We’ve seen a number of lenders reduce their IO terms available and LVR’s which interest only can be taken – so it would be best to get this sorted ASAP whilst you can.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
We had a house a while ago which had a converted garage to bedroom (it was actually a display home years ago and that was the office).
To make it fit in, they had run a row of bricks at the bottom and top to make it a proper large window – i prefer this aesthetically to just putting wall to wall glass which is an obvious conversion which will reduce the appeal somewhat from a value perspective.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
The key is understanding that cheap doesn’t equal good. Insurance profitability vs likelihood of making claims – so if they’re offering cheaper premiums where are they making the money?
There are still good cost effective options out there – but the number 1 thing you should be looking at is what you’re actually getting for your money in terms of the PDS.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
There’s no one right answer and it’s a blend of financial choices vs emotional.
A couple years ago it was a no brainer with rentvesting allowing you to grow far quicker – however with the multiple ongoing changes to lending requirements it’s now becoming a very attractive proposition to buy a PPOR first. By doing so in many cases you can:
*grow your effective long term borrowing capacity further
*use debt recycling to allow you to build a more tax effective debt structure, increase your borrowing capacity and allow deposits to still be made available for purchases
*relatively fixed reducing cost of accommodationIn situations wherein there is sufficient deposit available, the modelling I consistently do on a daily basis now shows that those who buy PPOR’s have the strongest borrowing capacity in the longer term, as they can deleverage the largest ongoing expense compared to rent which will continue to rise with time.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
It’s completely normal. The valuation for a purchase is completed with a contract of sale – generally signed with exception to NSW etc.
They’re not going to do a pre-auction valuation, there’s no point to it. You’ll find mortgage manager products are generally pretty restrictive too in these regards.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Is this for a pre-approval, or for a purchase?
It may mean you need to work with another lender who uses a different insurer and remove yourself from the application, dependent on servicing and policy.
Otherwise there are non-LMI options if need be – it’s just a balance of the overall deal which is the best pathway to go down.
Speak with a finance strategist which understands complex/out of the box solutions and you might find this can have a solution which is simple. :)
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Simple- consistent rollback of planning laws which will increase supply creating greater affordability, but also increase the quality of stock options available. (not having to cram yourself into an apartment/small block – but can live on larger blocks of land etc.
Look at Houston for an example of how this can work.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Thanks guys
It didn’t even cross my mind until the floods. That could have been a very expensive lesson.
Cheers
SWhen we bought our last PPOR – it was in a bushfire zone whilst there was significant bushfires burning a hundred km’s away. Even though it was contained all insurers had a blacklist of writing insurance for those few days in SA so we had to wait patiently hoping no freak issue would emerge.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
I hear a lot of people say lines about waiting for the next budget, next RBA update, next report – and five years later they still have no properties and waiting for x to happen.
In the end there will be some form of uncertainty in life – that’s part of the risk on taking any action. If it’s a good investment and you believe it will do well, you’ll just have to ask whether you want to take the leap.
I think I’ve heard reference to government stating they will make changes to the next budget for housing affordability for years upon years.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Organise insurance as soon as you sign contract – you do not want to have a damaged property which you cannot/won’t settle and lead to a long line of expensive legal issues.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Nice high voltage power nearby too as well – if you can walk away from this it might be the best option.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
As Terry has noted – legislation is federal so you shouldn’t have problems with this.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
