Hello Everyone,
I was wondering if someone could share some knowledge regarding finance.
As with the majority of people that subscribe to this forum I aspire to achieve the goal of becoming a professional investor.
I have always acquired finance for my properties through the traditional means of using my salary working as a chef to fund investment loans as well as a percentage of rental income.
However every time ive purchased a new property ive had to refinance.
My question is simply this.How do keep borrowing for further investing when the only income received is from property investing?
Is there a formula that I should apply about structuring finance?
Any thoughts would be greatly appreciated.
Thank You.[biggrin]How do keep borrowing for further investing when the only income received is from property investing?With extreme difficulty. Even if you had a fully paid off property worth $500k, at a 4% net return, this would still only equate to $20k income. Rent reliance may then become an issue.
And whilst you might use this to invest in shares and achieve say 10%, this is still only $50k.Serviceability models tend to take approx 30% of PAYG income, 75-80% of rental income and approx 50-60% of dividend income (or so I have heard) At least initially in your investing career, PAYG income is significantly greater relative to rental income.
Don’t give up your day job – yet, at least..
You must be logged in to reply to this topic. If you don't have an account, you can register here.
