There is a lot of investors attracted to 1 bedders and alike in areas such as Chatswood. They have solid tenants but as you can imagine strata is through the roof and the room for capital growth is terrible. So they convince themselves that they are negatively gearing by a huge amount which they are but their cashflow isn't growing and nether is…[Read more]

Morning Ralph,

It comes down to:

1. Amount of funds you are borrowing
2. Relationship strength (i.e other products they you may have with the bank)
3. Your LVR 
4. The actual Lender

What I mean by point 4 is that lenders will vary in terms of how they price. Don't expect CBA or Westpac to give you a big interest rate discount. Suncorp is…[Read more]

Jpcashflow wrote:

The biggest lesson I learnt was this:
• Most of our net profit was generated from "not from increasing the value of the IP through RENO" but from the purchase price.

I think this is the quote/lesson of the month. Very simple notion but it is often overlooked when people are wanting to purchase and make quicker…[Read more]

Good article Nigel. A lot of people look at negative gearing as the main reason for property development. 

Primary Place of Residence (home you live in) and yes IP is investment property.

Arguably I would get myself a local crew who know the areas, zonings, property markets, etc. If you are wanting to develop property as a long term strategy, I would invest to speaking to the local councils about zonings, minimum requirements depending on what you want to do, download the local council's DA guide. You can also get some good and…[Read more]

Is your house in Moorebank a PPOR or IP? Also what areas are you looking at purchasing?

I can't possibly give you a definitive answer without looking at the whole picture and anyone who does it talking out of their backsides. Yes its obvious that a negatively geared property is not fantastic for servicing however there is more to it than that. Have you factored in selling costs? Have you factored the short, medium or long term…[Read more]

There is a range of different strategies you can implement – it comes down to your risk profile and how much time you have to invest in the property. It is really difficult to give you definitive answer without looking at all the facts and what you want to do with the property down the track.

I would suggest looking at something with land content…[Read more]

Why are you not putting them on Torrens Titles?

Yes you can. Different ways you can increase your servicing; 1. Different Lenders will lend different amounts. For example CBA is very conservative, 2. Fixing a portion of your loan (but I would recommend against this for a number of reasons).  For example, Westpac increases the servicing if you fix the loan. 3. Factor in Negative Gearing into the…[Read more]

So do I and many other brokers but it doesn't make a difference. We all need to send the scenario to the lender and they would need to get pricing approval. 

What do you mean by serviceability? As in lender serviceability? You need your broker or banker to tell you exactly how much your servicing will be in both scenarios. There are also ways you could increase your servicing. 

Like anything you need to know what you are doing when it comes to commercials properties. Finance is a different story as well. Hate to say it but I have a lot of investors in your situation and sooner or later they offload the high outgoings unit and upgrade/downgrade to a house. I am not saying you should do this but I bet your strata is…[Read more]

Hi Andy,

I have read in a few places that the growth in the Hunter region has slowed and I also have a friend who is a mortgage broker in Maitland and she says that she is taking her clients interstate (even SA) to find property. 

Not saying its a bad place but do a bit of research and perhaps talk to a few of the local agents.

Regards

Shahin

Ok so renting out a unit may seem like a suitable option but that is completely dependent on person circumstances noted above. The amount you can borrow isn't linked to your deposit per se. I think he/she has based the $370 on your income. I wonder how this will change based on whether you rent and rent the property you are purchasing out. You…[Read more]

G'Day Simon,

Without having all the pieces of the puzzle its hard to comment specifically as a lot is dependent on the deposit that will be available after the settlement, your borrowing capacity and the need to be close to the city for work purposes. 

In short, one option (servicing permitting) could be to continue renting and then purchasing a…[Read more]

Are you looking at units due to budget? low entry point? I would be aiming for a house if budget permits. 

Hi There,

Don't mean to sound rude but I think you have answered your own question. New dwellings have their place depending on what type of an investor you are but if you are an aggressive investor then they generally don't suit. The reason for this is you cannot generally subdivide a block, develop the block of land, extend or renovate with a…[Read more]

Hi Jewel,

I cannot comment on point 1 but I will comment on the remainder. Points 2 and 4 are quite similar in that you have 2 options. First option is to sign the Contract of Sale and then do your building and inspection as well as have a conveyancer/solicitor review the COS during this cooling off period. The other option is to do this before…[Read more]