Just looking for some advise with my current situation. Six months ago I purchased a 2 bed unit in Canberra for $350K in a fairly ordinary condition. After some renovations we nearly have it completed with just the kitchen and bathroom to go. My loan is around the 330 mark paying off interest and principal.
The property could be rented for around the $390pw mark without the kitchen and bathroom renovated. Not a sound investment… but I have only recently started reading up on the subject. I recently contacted the bank to see what my situation is and they will loan another $410K with the current property rented out at $390 a week. My thinking is that I should live in and complete the renovations on the place I'm in and purchase an investment property elsewhere. Another unit in the complex with very similar renovations recently sold for $390K.
Any advice would be greatly appreciated.
Do you mean that property is worth $390k?
That would make it highly geared. 85% LVR. Getting another property would make this dangerously high – unless you have other property or cash.
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
I don't see any problem with being geared at 85% LVR – differen't strokes for differen't folks. My portfolio is highly geared at present – as long as I can sleep at night I don't see a problem with it.
Gcamilleri, it sounds like the bank is trying to cross-collaterise your properties.
From an investing perspective, there's a much better way to structure your finances. At present, the bank will lend you money for your second property but will take both properties as security (this is the cross-collaterisation). This can be a real nightmare in the future if you decide to accumulate more properties. Most investors avoid this like the plauge.Instead, you want ONE loan covering ONE property – don't give the bank more security than they need.
Cheers,
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Unless you can see good growth in this property I would sell it and buy 2 good investment properties and just rent where you want to live.
Cheersy
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