Yes you can certainly lease the property but just make sure you have noted in the Tenancy Agreement that the Tenants ackonwledge that you, your subcontractors and or Professional Consultants may enter the property in order to carry out such activities as they deem necessary in order to lodge a plan of subdivision and the appropriate notrice will be given.

Dont want the Tenants refusing you access to your own block to carry out a survey etc.

In regards to Selling the block then yes certainly you can do this however just bear in mind the Contract would need to be conditional upon the separation of Titles after the approval has been granted by the Council and the consent received from your mortgagee.

Cheers

Yours in Finance

Hi raj

As Terry mentioned hate to say the 20% has been and gone and you cant get that back.

Not sure who your lender is but there are a couple of tricks of the trade with certain lenders in reducing your LMI when it comes to land and construction.

Think i would be waiting until the building is completed and then taking out a standalone loan of 90% secured against the IP security with a separate lender.

Should then look at an equity loan on your PPOR to use as deposit for the next IP to make sure you dont fall into the same trap a second time.

As i often say careful loan structuring makes a big difference when i comes to the long term.

Most bankers would have no idea or if they do it isnt in their interest to suggest an alternative.

Cheers

Yours in Finance

adrian not sure who told you that but that is absolute rubbish.

In the main it is the other way around as a Broker will be aware of lenders credit policy wheareas the local Bank branch wouldnt have a clue. They have no discretion and cannot approve the loan as this is the domain of HQ Credit.

Big difference between Sales and needing to get the figures Credit at your average lender.

Other issue is that with all of the loans with the same lender then you are only exposed to 1 mortgage insurer and if they say enough is enough your financier can jump up and down all he likes but will not get the deal thru.

Cheers

Yours in Finance

Agree with Terry definately dont pay the loan down if you are thinking you will be moving out.

Just on your income i will assume you have been self employed for 2 years +.

Lenders will in most cases require your last 2 years Individual Tax Returns if you are a sole trader and some will average your income out between those 2 years. Others work on a 20% rule from the prior year and take this figure rather than you actual net income.

Some addback Depreciation and negative gearing (Not applicable for the first deal but could well be when the first property becomes an IP) others do not so it is a matter of seeing how to spread your income as wide as possible.

Also remember we are in Dec and although you will have lodged 1 BAS this Financial Year going to still have to work off June 2011 Tax Return figures.

Without more hard data it is hard to further assess but there is plenty of traps for self employed to fall into with the wrong lender.

Cheers

Yours in Finance

Hi Vader

Firstly welcome to the forum and I hope you enjoy your time with us.

I for one cant knock the Homeside Home plus package although again if you wanted a cheaper option it is out there with all of the same features of a true offset account etc.

Only thing i would say is if you are looing to rent the property in the long term i am not sure i would be putting all of your hard earned savings and FHOG into the loan itself but copping a bit of LMI and borrowing 90-95% keeping you cash as flexible as you can.

If you buy something for $300K why put in more than $30K as you will only have to reborrow it again down the track for your new deposit and then it will not be Tax deductible.   

Cheers

Yours in Finance

And dont take advice from friends down the pub who tell you "I think the ATO are investigating Trusts" or "My friend at the Bank recons managed funds is the way to go and he has a mate who can get you into the fund".

These friends spend 40 years telling you all the reasons why you shouldnt take action and then on retirement want to come and stay at your place and enjoy the riches of your investing.

Cheers

Yours in Finance

Miss Tess

I have a couple of clients recently build duplexes in Brissie with Dixon homes so might want to check them out as you wont get much cheaper than a project builder.

Sure they cover the G coast also.

Cheers

Yours in Finance

Hi Johann

Good to hear things are on the improve.

Looking at your numbers i am assuming with a property valuation of circa $410,000 and $100,000 in equity you have an existing loan of around $310,000. Unfortunately there is a big difference between actual equity and useable equity.

Think you will find it hard to find any lender go past 90% lvr so if we assume $410,000 x 90% = $369,000 – existing loan of $310,000 that is going to give you around $59,000 to work with.

Rather than use any of your personal savings i would be looking to pay down the principal on the home loan and then increase the equity loan or LIne of Credit by an equivalent amount so you can maximise your deductible interest.

Not sure whether the new income in Feb is going to be used to support the existing borrowing but will depend on what it is as to whether lenders will accept it.

Might be an idea to get the structure in place now in readiness for what you intend to do early 2012.

Cheers

Yours in Finance

Hi Booge

Actual equity and useable equity are 2 totally different things and as Derek has well pointed you are going to be limited on what you can access.

With a client looking to do exactly what you mentioned i always prefer to work backwards and assume that if you are seeking to purchase a property of say $200,000 and a maximum loan of say 90% then what would we require.

In this case and with making a couple of assumption we will assume you need $20,000 which represent the 10% and a further $10,000 which represent the acqusition costs.

If we assume that your current property is valued at $320,000 and the acessible equity is 80% of this figure less the existing liability i.e $320K x 80% = $256,000 less existing loan of $170,000 = $86,000 .
 
As you only require $30,000 to cover the total amount for the investment purchase this means structured correctly you could buy another IP at similar price and still have a decent cash buffer.

Most important part is how you put it together and structure the loans separately without cross collateralising the securities is the main thing to enable you to grow with your portfolio and not only when the Bank feeling lending.

A good independant mortgage broker should be able to assist you in setting up the loans and structures.

Any other questions post away.

Cheers

Yours in Finance

Bill anything is possible but whether it is doable is a different matter.

Not an exceptable location to Gemworth and limited acceptance for QBE (restructed purchase price) so going to depend on a 101 other factors.

Would suggest you Broker look at a lender with DUA as on a standalone basis i think you have no chance.

Cheers

Yours in Finance