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I am a “yet to invest” investor. Can someone tell me how it is that people can buy upwards of 10 properties (Buy & Hold strategy for long term rental income)?? As far as I can see on advice from a couple of banks, their Serviceability ratios prevents it, even with positive cashflow!!
DSR 1: (Commitments + Interest on Investment Loan [P&I] less 70% of Rental Income) / Gross Income Excluding Rental.
DSR 2:(Annual Loan repayments + All Other debt commitments) x 100 / Total Income + 80% rent.
In both cases,with each new property purchase, the numerator always increases because commitments are based on P&I loans, but only 70% or 80% of the rental income is counted. This means the DSR ratio always increases, limiting you to only a couple of purchases in order to maintain as 30% or 40% Servicability ratio.
How do I manage to get around this seemingly impossible issue?
Chris Allan
[email protected]If you can keep coming up with deposits you can keep getting loans.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi
Who are the lenders that take 100% rental into consideration?
Are there any catches in other areas of the agreeements?
Cheers
Hi Alf,
HSBC will take into account up to 100% of rental income,Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:1800 820 500
VICTORIAPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
