Hi all,
Im very new to all this but here goes…..
I have 25000 to put towards a home, I'm thinking I get a home in Brisbane (Logan area) put renters in and put an extra 400 a week on top of what the tenants pay to reduce loan and gain more equity faster. So I can buy another. I have seen homes recently for 220-250k which is the price range id be looking at.
I live in Sydney, I pay 220 rent with my two brothers and save $400 a week, I also have 4 children 8mths to 7yrs. As we all know Sydney is waaayyyy to expensive to buy. My plan is to get a portfolio together then later use them to buy my own home in Sydney im 35. Is this a good way to go??
Ps; I lived in Brisbane for 1yr and only moved back Jan this year, I personally dont like living in Brisbane but properties are good to buy.
I hate to put a dampner on your idea but with $25K you will pushing to buy much as you will need 5% deposit and unless you buy new or not previously occupied the Stamp duty is going to erode much of your deposit together with the LMI.
Whilst you can still just about get 95% lvr based on a $300K purchase price 5% alone would be $15K.
Doesnt leave much for the rest.
Secondly wouldnt be paying the loan down but placing the funds onto an offset account linked to the loan.
It saves you interest but doesnt contaminate the interest in case you decide you want to have back all of that overpayment for personal purposes such as a PPOR or other non deductible expense.Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Richard has a good point, the $25k won't stretch very far, unless this is your first property in which case you can get the first home owners grant and an exemption on stamp duty. Have you ever bought a property before?
Whilst I like your idea to invest in Logan (I currently have a townhouse there and I previously made a good gain on a house in slacks creek approx 60% in 6 years), you can still buy cheaper property in Sydney. Check out some posts by Nathan Birsch in the "General Property" forum, he has demonstrated buying properties for this price range in the Mt Druitt area and making a decent yield (after renovations).
Areas such as Penrith, Cambelltown, Blacktown are also worth a look in this price range.
As for your plan to buy investment properties now and leverage off them later to buy your own home, I think that is fine. Unless you want to claim the FHOG (in which case you need to live in the property 6 months out of the first 12) then that will be a different scenario.
Bare in mind also that Brisbane's property market is a good time to buy, but it's possible it could fall further.
Let us know what you decide.
Darren.
Thank you both for your views….
I havent brought a house before and am aware that I wont be eligible for the First Home buyers Grant if Im buying for Investment….That doesnt worry me at this stage as I will just save the funds I need to cover expenses and will use the First home buyers Grant when I purchase my own property down the track.
So I have 25000 now is 30-35k good to start with for a 3bedder 220k in logan? I was looking at buying late next year. Also who do I deal with in helping me sort out pre-approvals? since I live in sydney do I do it from this end or from Brisbane
Thanks for your help : )
Why not pool your money with you brothers and buy in Sydney? That way your brothers could be paying rent/payments with you and you would still get the benefit of it being an owner occupied resident. Two is always better than one and three is even better. Only do this if you really get along with your brothers and stipulate what will happen if someone want to sell later (been down this road before!).
We have stopped arranging pre-approvals for clients as they are really not worth the paper they are written.
In the current climate they are really only valid for 30-60 days max and in many cases lenders wont even do as credit search or assess the loan.
Of course if it requires mortgage insurance (and your loan would do so) the LMI policy and documentation requirements can change by the day so just because they say Yes today doesnt mean next week you will get the same answer.
Certainly with $35K you are going to have a few more lending options.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Sydney is predicted to have better CG than Brisbane. So if that follows predictions your Brisbane IP will not keep pace with Sydney property and you'll still be unable to buy in Sydney.
So why not buy in Sydney? Still some good buying out west with opportunity to value add. And being in Sydney you can do some basdic stuff yourself to increase equity. Eg paint, tidy.
indira wrote:Thank you both for your views….I havent brought a house before and am aware that I wont be eligible for the First Home buyers Grant if Im buying for Investment….That doesnt worry me at this stage as I will just save the funds I need to cover expenses and will use the First home buyers Grant when I purchase my own property down the track.
So I have 25000 now is 30-35k good to start with for a 3bedder 220k in logan? I was looking at buying late next year. Also who do I deal with in helping me sort out pre-approvals? since I live in sydney do I do it from this end or from Brisbane
Thanks for your help : )
Hi Indira
Welcome to the forum.
A $220k property with your deposit is possible – however, as Richard mentioned, a larger deposit would broaden your scope of lenders.
There are so many factors at play which will determine whether or not it's possible based on your current $25k deposit. It's best to have a chat with a decent mortgage broker about your options.
As far as paying down the loan as quickly as possible in order to purchase another IP. Have you considered adding value to the first one instead? That way, you can create the equity. It might not be an option now due to your limited funds but perhaps it's something you may want to consider later on.
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]
if you can find something new in Qld and commit to purchase by 31st of January 2012 you will get the Qld Government $10,000 grant for buying new. You have chosen well to identify Qld for capital growth due to the unprecedented mining investment that we are about to see roll out over the next 36 months.
Consumer sentiment is low as there is so much economic change however the reality is that Australia (especially WA & QLD) are in an unprecedented and fortunate economic position, now is a good time to buy if you are in a position to (as has already been established a broker will help you get to that point).
Josh
http://news.domain.com.au/investor-centre Try this site for IP returns.
Theres some really helpful infomation in your posts thank you everyone
Kaylah, I wont buy with my brothers, one doesnt really want to buy a home and the other is half committed…Im better off doing it myself lol to possibly avoid problems down the track!
Jamie, yes as I get closer to buying I'll be in touch with a good mortgage broker. As im looking at buying late next year Josh I wont be eligible for the 10,000 grant damn.
I never thought about creating equity in the house to add value so thats something else to think about as well.
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