- Hey everyone,
Just thought I would start off and say this forum has been a great help in starting my Property Investment path. I was reading the forum for about 12 months before I brought my first property and joined not long after.
I am looking for some advice with what to do next. I have a path in mind and would hate for anyone to think I was asking for a hand along the whole journey. More looking for some poisitve comments and a few helpful suggestions
Anyway here is my situation
February 09
Settled on a $339,000 2 x 1 townhouse is Mosman park WA. Loan of $308,000First home buyer
Strata – $250qtr
Water Rates – $600pa
Council Rates – $600paCurrent
Townhouse BANK valuation – $390,000
Loan – $300,000 (just changed to IO with offset)
Signed 12 month Lease from Nov 1 – $425pw – self managed
Credit Card debt – $4000 (bathroom reno & holiday)
No other debt apart from the above
No savingsIn 2 weeks time I am going to move into my GF's apartment she just purchased for $50 a week plus bills and food and so on. I currently earn $58,500pa. I will be looking at saving about $2000pm (going to my offset account) from when I move in with my gf.
Just wondering when and how I should make my next purchase? I am thinking once I have about $20,000 saved I can use that and draw equity from my townhouse and purchase something for around the $400,000 mark, something with a large land component with future development potential? Or am I setting the bar a bit high and look for something around the $300,000 mark?
Is there anything else I should be doing with my loan and/or finances?
I will be studying at uni (paid for by my work) from the beginning of next year. I am 22yrs old so I guess I am a little worried if I do end up with an extremey high LVR but understand sometimes it's needed to get ahead.
Sorry about the long winded post. Any comments and/or suggestions would be much appreciated
Thanks everyone!
P.S sorry if it's a bit hard to read, at work so trying to get it posted as quick as possible haha
You have to be aware of service ability as well as equity when borrowing. It is a good idea to go and talk to your loans manager at your bank to get an idea of your borrowing capacity before you get too excited out in the market place.
If you are planning on getting aus study any negative gearing is added back to your income to work out your payments while at Uni .
Is there anything else I should be doing with my loan and/or finances?
Yes !
Why pay the highest interest loan (credit card) off as slow as possible?
Pay it off as soon as possible.If the Reno was for your investment property and you put it on credit card you should borrow from house IP Loan as tax deductible.
If you redraw equity it will most likely be 80% LVR that's $12,000 (check with loans manager)
If it is any higher you have to pay loan Mortgage insurance!So if the deposit is not 20% after the stamp duty being paid the LMI will be payable on the new loan. (check with loans manager)
Can you afford a loss of $186 a week?
or pay off loan one down to $200,000 then if interest rates get as high as 10% the property doesn't cost you anything to keep it as it is positively geared.1. pay off your credit card debt or which ever posing a higher interest.
2. pay attention on interest rate rise. hinted would go to 4.25% by the end of next year. so that is 20% increase of repayment from 5 to 6% home loan. rent wouldnt be able to cover that.
3. LMI is expensive. instead of going 95%, better go 80 – 85%.
4. you should have a buffer in case your IPs unoccupied for a longer period than expected. *knock knock wood* or you lose your job and couldnt find another one asap or forced to take a job with lesser pay.
5. buying 300K or 400K is no different. calculate in percentage. in fact smaller would be favorable on the stamp duty, but yeah more works on maintaining.
6. saving 20K for 400K property is merely just paying the stamp duty. i remember i was paying $17K+ on 380K property. so i guess u need more that now you used up ur FHOG
7. take it easy. property is long term investment. dont get all the juices out just yet.
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