hi all,
i currently own one investment property, (3 bedroom home in rye, victoria). its fully paid off. it needed a face lift so i recently spent 10k renovating the interior; basic cosmetics including new floors, carpets and kitchen…its looking good!! similar properties are selling for 240k in the area
my problem is im not sure what to do with it from here. i still live with mum and dad, im currently not working!
i want to invest in more properties, with minimum or no outlay….i like the idea of positive cashflow! what should i do??
rent? sell? borrow more money to fund another investment property?? i have no savings at the moment.not sure what to do…any help would be great?
cheers,
desk top[8D]You could sell it on a wrap or a lease option wich will give you very good [email protected]% $1845 month and a deposit of about 20k per month. Good start to go to a lender and say you have guarentee income followed by equity on settlement. Use the 20 k to buy your next and so on…
Dave
thanks for the advice…..
not really familiar with wraps and how they work. have only read about the concept. also, im not sure what you mean by 20k per month???
desk top
Hi Desk Top, you’ve done well so far!!
Talk to a mortgage broker. there are loans out there that you can get based on the value of your asset alone, which you could then use to fund more properties. So you definitely don’t have to sell it, and I wouldn’t wrap it as you have no loan, and wouldn’t be able to secure one against it after you wrapped it.
Cheers
Melhi mel
thanks for the advice, appreciate it. looking like i will find new tenants and rent it out again. after my renovations, i should be able to get a higher return.
i will also take up your advice and talk to a mortgage broker.
cheers,
Desk topDesk Top- no job and no savings? You could sell your current IP and buy some cheaper ones with a bigger rental yield. Given that you’re living at home, presumably your outlays are minimal right now. As you’re not working, serviceability might (probably will) become an issue, if you don’t sell up the current IP and resease some cash.
kay henry
thanks kay henry – what kind of smaller properties do you recommend that will return a higher yield? i was thinking if i could hang on to this property, seeing that im still at home and my outlay is low, i could use the equity to service another “positive cashflow” IP. im yet to find a property that can return a positive income, (but still desperately looking!).
however, if i did sell the property, would i be subject to capital gains? ive had this investment for over 15yrs.
cheers,
desk top[suave3]Desk top,
If you know you can afford the repayments then you can easily get a loan to buy another property for about the same value without a job.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
im confident that i will be able to make the repayments, and i wont be un employed forever! id would much rather look for another IP now rather than later. out of curiosity…if i did sell, will it be subject to capital gains??
desk top
If you haven’t lived in it the answer is yes.
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
i havent lived in it however ive been told that if you sell after a certain period of time, you are not subject to capital gains. ive owned the property for over 16yrs.
desk top
Originally posted by Desk Top:i havent lived in it however ive been told that if you sell after a certain period of time, you are not subject to capital gains. ive owned the property for over 16yrs.
desk top
I think you are subject to CGT coz it is an investment property for 16 years.
Kind regards
Chan Dollars
[Retire Young, Retire Rich] [strum]thanks chan dollars
appreciate everyones comments
desk top[suave3]
Simon said:
“If you know you can afford the repayments then you can easily get a loan to buy another property for about the same value without a job.”
Simon, don’t lenders have bottom line criteria under which they lend? So I could be unemployed and borrow 240k if i have that much equity? What happens when interest rates rise and unemployed people struggle with their repayments?
Just wondering if the whole “you have to have a job” thing has disappeared from lending criteria?
kay henry
very good question…..i would also like to know how lenders manage unemployed clients with equity.
desk top[suave3]
They are basically lending on the asset.
They lend 65% of the total valuation which covers them if they need to sell the property to pay the debt.
These deals are there for a reason. They are not regulated by the UCCC and as such it is up to the borrower to make sure he is comfortable making the repayments. Rates are currently 6.85%.
If you have two rents paying one property then it might be feasible. Up to you totally and please don’t think I am trying to talk anyone into anything here. Just presenting options.
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
thanks simon, appreciate the options you are suggesting.
Simon said:
“They lend 65% of the total valuation which covers them if they need to sell the property to pay the debt”will they ever lend 100% of the value of the property, and then use the 2 properties as security to recover the debt??
desk top
HEY
DESK that YOU?
tech/a
hi..not sure who you’re after..
this is desk top from melbourne
Why not sell and use the funds to buy lower priced IP,s and keep some money aside in an offset account to cover repayments if property is not let for a period of time.You will make more money using OPM .
Russ.
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