I’m trying to buy my first property and going thru a mortgage broker.
I can buy an expensive studio in an expensive tourist area and holiday let for most of the year in which case my “rental” return would yield 10.47%. I would live in it 6 months of the year which would initially decrease my return but get $7000 grant plus save $7000 on stamp duty… effectively I feel like I’ve been given $14000 which I wouldn’t at any other stage of buying and my broker thinks I’d be mad to miss the once off opportunity.
My concern is that I’d have to wait a full tax year for the returns to show on paper before I could get finance for my next cheap (around $50-100000) investment property, therefore delaying the positive cashflow from investments for a full year.
It will be a private holiday letting run by myself instead of thru any agents so I wouldn’t have any lease agreements or such to back myself up until the tax return is done a year later.
Am I right in thinking that I’ll have to wait a year or is there another way to prove that I’m not losing money (or at worst $40/week) therefore establishing that I can borrow for further properties?
I don’t know whether to trust my gut (and optimism… because I may not achieve my investment goals) or trust my broker… he says he has years of experience and sees a lot of people trying all sorts of creativity with property.
HELP??
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