Hi

Briefly,
You would want your existing home loan to be IO as you would want to put all spare cash into paying down your new loan.

The old place can still be counted as your main residence for up to 6 years, but you can only count one place as your main residence. So if you count the old one, and sell it will be CGT free, but if you were later to sell the new one, it may be liable for CGT even if you have lived in it the whole time. Better speak to a good accountant about this.

If you are going to sell, then the agents will charge 2-3%, plus you will have legals, govt charges and bank exit fees. Then if you were to buy another investment property to replace this, you will have stamp duty again as well as legals, loan fees, and govt charges.

Terryw
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It would also depend on your rents and other incomes. When I started investing I obtained 6 x 95% loans for investment properties within 6 months before the bank got a bit worried. Then I just went to a different bank.

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Those fees are ridiculous!

I want to become a property manager in WA!

Terryw
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hmmm, i would probably pay off the loan on the PPOR, then borrow against it.

Then look for undervalued properties and pay cash (lending to a separate trust structure first). Then try to mortgage these properties at 100% of the purchase price to release the money back. Maybe deposit the funds in a 100% offset account while thinking of what to do next.

Probably some shares too.

Depending on your situation, maybe look at gifting it to a trust too. Too much money to be owned by yourself. Maybe spend some of it on legal/tax advice

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Hi Rob

You probably have some friends there who could keep a general eye on the place, and the agent would be managing the property, doing inspections etc. All you would have to do is check your bank account on the internet to make sure the money is going in and the loan is being paid.

Also get a good lawyer to look at the deal before you sign – maybe an Aussie lawyer in Spain.

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Novo

nearly all lenders lend up to 90 or 95%.

The risk fee you were asked to pay would be similar to LMI which most banks would charge you if you borrow over 80% LVR, so this is not too bad. The exit fees are fairly higher though.

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I think you could do this yourself by just letting the interest capitalise or by setting up another LOC and using that to pay the interest, or part of it – maybe the shortfall.

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Selling one would be one option, but if you don’t want to, then,,
You could set up a LOC on your home, use this to pay for the shortfall each month. This is basically what the investors direct loan does anyway.

Your LVRs are fairly low so your position is not too bad.

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I think that it common. It you do the inspections before signing, then they could sell to someone else in the meantime – leaving you out of pocket.

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That would possibly get you into the market quicker. But you would have much higher repayments, so you would need more growth/rent to cover it. You have to work out if you think this is worthwhile. Also consider the effect of a personal loan on your home loan application. will you still be able to qualify? Personal loans have higher rates and shorter periods, making the monthly repayments high – this can hurt serviceability.

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