Borrowing Capacity

Viewing 6 posts - 1 through 6 (of 6 total)

ange_doug
Participant
@ange_doug
Join Date: 2003
Post Count: 11
August 5, 2003 - 5:49 am
I am paying off four properties across three locations in Qld. My question after watching the excellent Today Tonight report is how I take it to the next level and push on to purchase more properties.
Currently the latest valuations are $1,045,000 for the combined 4 properties. The debt is $698,000. The bank (admittedly only 1) has said that my servicability will enable me to take on $150,000 more debt. Salary $55,000 + rental of $650 a week gross.
How can I borrow more money and establish serviceability to the banks or lenders?
wannabe
Member
@wannabe
Join Date: 2003
Post Count: 16
August 5, 2003 - 6:08 am
Hi, wish i was you ,i’m trying to figure out how to work out my 1st IP wich has been negative since day 1 , rent not paying costs, did you borrow on equity?%100, or do you have deposit? i would appreciate a reply as you can see we are new to this.
aussierogue
Participant
@aussierogue
Join Date: 2003
Post Count: 983
August 5, 2003 - 6:13 am
ange – by the look of your gross rental seems all your properties are negatively cashflow. remember when you negative cashflow it limits the number of properties you can buy. maybe you shld sell one of your properties and with the money pay down the other three. then you may find you go from 4 negative to 3 positive
then the bank will lend you more money
cheers
Stuart Wemyss
Member
@stuart-wemyss
Join Date: 2003
Post Count: 598
August 5, 2003 - 6:18 am
Hi Ange & Doug
Welcome to the forum.
If serviceability is an issue to rental yield is your answer. If properties are financed at 80% then you need a yield in excess of 8.8% for the property not to affect your borrowing capacity. If financed at 100% then yield needs to be over 11% (pretty hard but doable).
I have an article being published in Oct/Nov Australian Property Investor magazine titled “Unlimited Finance” which should answer most of your questions about borrowing capacity.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.au
ange_doug
Participant
@ange_doug
Join Date: 2003
Post Count: 11
August 6, 2003 - 11:14 pm
Thank you very much mate. I read your article titled “No Money Down Strategies-What the Banks really think”. Very interesting.
I will eagerly await the Oct/Nov edition of API.
Thanks again.
quote:
Hi Ange & Doug
Welcome to the forum.
If serviceability is an issue to rental yield is your answer. If properties are financed at 80% then you need a yield in excess of 8.8% for the property not to affect your borrowing capacity. If financed at 100% then yield needs to be over 11% (pretty hard but doable).
I have an article being published in Oct/Nov Australian Property Investor magazine titled “Unlimited Finance” which should answer most of your questions about borrowing capacity.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.au
ange_doug
Participant
@ange_doug
Join Date: 2003
Post Count: 11
August 6, 2003 - 11:17 pm
Yeah, borrowed on basis of equity, admittedly built up in low value regional city property ($112,500 value).
In retrospect my question a little misleading as figures include my owner occupied house ($380K).
Good luck.
quote:
Hi, wish i was you ,i’m trying to figure out how to work out my 1st IP wich has been negative since day 1 , rent not paying costs, did you borrow on equity?%100, or do you have deposit? i would appreciate a reply as you can see we are new to this.