HI, guys, I am a newbie to the property investment. I just put a 5 percent deposit on a property and still waiting for a loan approval, as i am a first-time buyer. This property I hold on to has good rental return, which covers the interest and nearly other costs as well. So I am thinking about buying another property. The problem is I dont have deposits now. Is it possible that I could get equity loan after my first loan is approved. And is it too rushy to think of investing in another one? Hope my question is not too funny?yarposMember@yarposJoin Date: 2004Post Count: 247
there is nothing wrong with proceeding with the next deal if it stacks up and you have assessed the risks…..however….where will the equity (difference between value and debt) come from if you have just bought on 5% deposit? Also consider how far you can stretch your self and can you survive if things go pear shaped for a few months (loss of tenants, lose of job, illness, more interest rate hikes etc)
Actually I am going to pay 20% off my first property. Actually my original thought is not to buy a IP, but when I got to know more about the property investment, I felt there was something I should do in this area. Now that I had already signed the contract for my first property, I could not change the rate of deposit I am going to pay. That's why I am thinking of using the equity loan.yarposMember@yarposJoin Date: 2004Post Count: 247
ahhhh…..the plot thickens , I thought you may be putting more down but wondered why you just didnt split the deposit if you wanted to get another property (and wear the morttgage insurance I guess). The contract is different from the source of funding, you didnt contract to pay 20% deposit did you?
If your finance organisation lets you do the draw down, and you have no other funds , you are well into fully extended with mortgage insurance territory. That is a risky place to be especially at the moment…..but that may not worry you. If things are that tight I wonder of you would be able to fund all the buying costs for property 2 and still satisfy the finance parameters (broker types here may want to comment). Sounds like to big a stretch to me (until you create more equity or more deposit) but if you post some actual numbers maybe they could give you a hand.BanjoSmythParticipant@banjosmythJoin Date: 2007Post Count: 44
When increasing your property portfolio it is vital that you have created a buffer zone. For whatever reason be it injury, illness downturn in the market. Remember if you only loose real money when you are forced to actually sell the property, so if you have created a big enough buffer to withstand a market drop you should be fine in the long run. Its great to hear someone who is so keen to start expanding their Property Investing. Best of luck
PS. It would definitely be a good idea to take out some income protection. A basic plan should only cost you somewhere around $500 per year. Better to be safe than sorry.
Best of LuckEvent HorizonMember@event-horizonJoin Date: 2008Post Count: 90
do you mean your putting down 20% or our getting a 20% discount, you mentioned is positively geared also, hope this isnt a rental guarentee for a set period on a new development claiming there selling at 20% discounts, sorry to sound like your mother but as the posts above have pointed out nows the time to be cautious especially for a newbi….
For the record I dont usually invest again until i have at least 40%-50% equity on all property I own including PPOR. This may sound cautious but it usaully only take 1-2yrs for 50% equity to return after each purchase once you get a few properties and given im negatively geared on mainly high growth inner city assets (which is what i feel comfortable with as its low risk), so I need to wait a bit anyhow for yeilds to come up to free up cash flow or renovate them to increase yeild equity.
Dont try to do to much to soon, you will be suprised how quickly you can build up a folio even at my slow pace.
Thank u , guys. I am not sure if I make the right move on this investment or not. This property is priced at 438,000 and is a dual-key unit, of which I paid 20 percent, not a small number. I could not figure out why I put so much deposit at the first place. Maybe I did not mean to invest originally. Like I said before, I did not realized I was interested in property investment till I was introduced to take this place by my friend, who is agent by the way. But now I ended up with nothing in my deposit.
This property yields good return though, 7.2%. The thing thats been troubling me is that how the dual-key units would go in its value. Cant see clearly on this. It is in parramatta. I know a lot of talks go round about this place, which is sensitive like dual-keys. Seems to have good prospects, though a lot of people might be against it. Whatever, I have been attached to it, whether good or bad. But I still wanna hear more from you guys, cheers.