hi everyone,
i was after some advice on my current situation. i work in the mining industry so my wage is good and have been able to brow from the banks with ease un till now where iv found my self maxed out. my ip is in Bayswater WA, the lone i have for that is $370k and am reciving $420pw in rent. my ppor is in melbourne and have a morgage is $470k.iv been thinking of selling the Bayswater ip and have been told will get around $430k and reinvesting it in melbourne where i live and will be easer to manage. everyone in WA has been telling me to hold on to it and wait for the next "boom" to happen which very well might, hence i am confiused.
Cos i am new to property investing i am wondering if this is a fair position to be in or is there any other advice i should follow.
any feed back would be much appricated. thanks.If you sell you will be up for a lot of fees: agent, CGT, legals, loan discharges etc
And then a lot of fees on the new purchase: stamp duty, legals, loan fees etc.
I would suggest you do the sums and then get out your crystal ball and see if any extra growth in melbourne will make up for these fees.
(and if any money left over invest in a dictionary??)
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
Hi Duckman,
I'm quite familiar with the Perth market, but not so much about Melbourne (3rd party articles). A few things you should consider and if you want to speak with me any further, feel free the cost is only a phone-call.
1) It doesn't matter how good a loan app is, if a bank isn't lending, it isn't lending. I know of cases in the GFC where some banks changed their servicing calculator (a tool the use to qualify you for a loan) in such a way, that people on great incomes with good deposits/equity couldn't get funding.
2) Look at some strategies which you can minimise non tax deductible debt. I can talk to you in private about this.
3) Look at your loan structures. It looks like even if you used equity from your principle place of residence you could possibly make it a stand alone loan. This means it's safer for you and could help you borrow more in the future. I'm not 100% sure on this, but more then happy to see.
4) Perth is in a great position. Here is just one article I came accross recently:
http://imagebin.org/134761thanks Terryw i know my spelling is not up to scratch (im a tradsman on a mine site so no real need) but i am very intrested in property and hope i am going about it the right way.
thanks for your help guys.
i have no knowledge of Bayswater, WA. But the most common advice is buy, but hardly ever sell. It makes little sense to sell, incur all the costs of selling/buying – to invest in property somewhere else.
– This assumes that the new purchase performs about as well as your existing ip.– The time to sell is when you retire. So choose your investments very carefully.
You may need to consider if it worth your while to sell in wa ie cost of sale + cgt vs what you will get elsewhere. If you buy in victoria, you maurice be subject to land tax as well.
The property in WA is +ve cf so isn’t putting a strain on your finances.
Are you renting out your ppor? This will increase your cashflow substantially & you can maintain its cgt-free status for 6 years. If you need a melbourne base you could rent one.Hi Duckman
The bank has refused you to lend more because they see you as becoming more riskier, most likely, you're IP is negatively geared and having to pay for your PPOR, you are spreading your self too thin financially hence the bank don't like you when you becoming riskier.
I'm glad no one has mentioned about balancing your portpolio because that's exactly what you need to do.
You need to find a POSITIVELY geared IP or cashflow positive IP. Having a positively geared IP or cashflow positive IP provides you casflow after all outgoings where deducted hence it will help to service your negatively geared IP.
For instance, if you have one negatively geared IP which is costing you $200 per month, you need to balance your portfolio by acquiring a positvely geared or cashflow positive IP which gives you $200 net cashflow hence your two IPs will cancel each other so your bank will continue to give your a loan…hence this will avoid you from hitting the financial BRICK WALL….It is all about balancing your portfolio.
By balancing your portfolio (i.e. for one negatively geared IP, acquire a cashflow positive IP) the sky is the limit because your IPs are paying for themselves…hence self sustaining IP.
Also, I recommend, you need to invest in your self (e.g. atten seminars, read book etc) because wealth is about 80% Psychology and 20% strategies…that is the more you learned, the more easiers it becomes investing in property.
Good luck and all the best mate!
Cheers Leo
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