Personally, I’d look to get the reno wrapped up. Once that’s done – you can have the property revalued. If the renovations added value, you could tap into this equity and use it towards purchasing the next property.

Cheers

Jamie

I reckon you can have your cake and eat it too.

If you buy an IP, search for something with a decent yield that will look after itself (or come close to) in terms of rent coming in and costs coming out.

If you buy a PPOR, you could consider renting a room or two to friends/family.

Both of these scenarios allow you to enter the property market…[Read more]

anhie wrote:
Thanks for your helpful advice. I know now its definitely wise and best to get a mortgage broker assistance.
As a inexperience first home buyer there’s of options and hidden costs associated with
mortgage that a broker can explain and answer questions you may have.
I’m guessing Jamie a mortgage broker? But isn’t he from NSW. I’m…[Read more]

The first property we done it with was vacant. We were able to get access to the property before settlement to carry out renos and advertise for tenants. Both conditions were worked into the contract before exchange.

Cheers

Jamie

If you were topping up to 80% you’d have access to $170k ($400k x 0.8 = $320k). Take $320k and subtract existing loan of $150k – giving you $170k to access.

The property that you purchase receives income in the form of rent. That how it’s possible.

Cheers

Jamie

Equity can be achieved through future growth or manufactured through renovations.

With you offset – you can take back whatever you put in.

Another thing to note – cash from your offset will not be deductible, whilst new borrowings against the property will be.

Cheers

Jamie

Hi Anh

Do you think you’ll want to tap into this properties equity within the first five years? If so, I’d ask them about their cashout policy. You might not think you’ll need to refinance now – but if down the track you do decide to use some of the equity and they don’t allow it then you’ll have no choice but to go elsewhere. Which is likely to…[Read more]

anhie wrote:
hiim looking to buy house for around 400000kmeans i will need to have 20% which is 80k to avoid lmi

LMI doesn’t have to be a bad thing. I’d rather take out a 90% lend and pay some LMI (which can be added to the loan) then wait while I save up a 20% deposit. Also, if this is going to become an IP in the future – you probably don’t…[Read more]

Shape wrote:
How much is the rent going up by?

We’ve moved into this one. It was renting for $425 p.w previously – it would get closer to the $500 p.w mark now though.

Cheers

Jamie

We just spent $7k on renovating a 3 bedroom house (the bathroom hasn’t been done though). We painted it ourselves, installed new kitchen doors/handles/sink/oven, re-carpeted throughout, new light fittings and other bits and pieces and tidied up the yards.

Cheers

Jame

Hi slow achiever

I thought you were talking about living off equity (ie tapping into equity and using it to fund your lifestyle).

I don’t have a problem with accessing equity to purchase further properties. That’s how most of us build our portfolios.

Cheers

Jamie

Thanks guys.

Parts of the gyprock were replaced and then tidied up with some plastering. Lots of sanding and repainting the roof gave it a nice finish.

Cheers

Jamie

I’m not sure about the legalities around it but it’s something I’ve negotiated with vendors before.

Cheers

Jamie

Another excellent site and one to add to the due diligence checklist- thanks for sharing.

Cheers

Jamie

Why not give Michael a call – he’s in Sydney.

Cheers

Jamie

Watch a DIY youtube clip and get cracking

It’s a job that can be carried out by any carpenter or handyman. Is the property being managed at present? If so, ask them for a contact.

Cheers

Jamie

Hi Don

I would work out exactly how much the IP will cost you to hold over the next 12 months.

If it’s less than the break fees of $7k I’d consider holding (besides – it’s probably not the best time to sell at present).

Cheers

Jamie

slowachiever wrote:
<The idea they have is to never own anymore properties , and basically build a gravy train I call it ,of equity and at the end of it all ,just keep scooping money off the top of the equity .

The new NCCP legislation coupled with stagnant/decreasing growth in most property markets at present would make this a very difficult…[Read more]

I agree with your understanding re high capital growth/low yield and vice versa. However, there’s often exceptions to this rule with decent yield and decent growth being achievable in certain areas.

Like I said before, there’s no wrongs or right and if you ask for an opinion your bound to get a number of different points of view.

I think what’s…[Read more]

zgnilek wrote:
Jamie M – you state that 4%+ is low yield on rental.  Correct me if I'm wrong, but I thought 4%+ rental yield is reasonable for a property that is expected to appreciate consistantly at 8-11% pa.  Please explain.

There is no right or wrong – different strokes for different folks. To me, I’d consider a 4% yield low. Something y…[Read more]