Hi all,
I thought id start a new thread about my situation based on the following question. Thought i'd get some more opinions on this idea.
I have enough cash to buy an investment property for around 300k outright. Though I wouldnt want to spend ALL of my money on the investment, i'd want to keep some aside as a buffer.
Giving that I am still only an apprentice tradesmen, I dont have a very high income. Its around 30k gross a year. Therefore im really unable to borrow much. One broker got back to me saying I can borrow around 90k max?
Anyhow so a fellow member on this board gave me an idea to buy my first place outright to get a foot in the door and then later on once im a qualified tradesmen and my salary goes up, I can then borrow more and pull the equity back out?
It wont be for another 2 years before Im a qualified tradesmen. So it wont be for another 2 years before I earn a decent wage.
If I was to do this, id be looking at IP around the western sydney suburbs.
Thoughts?
Cheers
AJIt could work. It's not the ideal way to go about things but your situation is unique given your limited borrowing capacity.
You won't be able to claim any interest deductions as there's no debt securing the property – meaning you'll be paying tax on the income. That said though, the additional income will improve your borrowing capacity for future purchases.
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]
That be around right; 30k wage single…roughly around the $70-$120k mark depending on lender, product type and LVR.
And yes, drawing out equity later is a valid option; but how much you can draw out will depend on.
1. Your income then
2. Valuation
3. REASON for the draw out + banks approval.The bank may not let you draw out the funds and just have it sitting there as a buffer ( depending on lender, LVR and product type of course)
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Hi AJ,
I wish i had your problem when i was your age…. haha. Nice work on the 300k…..
If it were me i would ask a mate, someone that you trust, preferably someone with a trade to go in with you….
Seeing as you can only borrow 90-100k you both combined may be able to borrow 200k+…
Im sure that could buy you a unit in a good street, let it rent for a year then use your savings to jam a new kitchen and bathroom in it, bit of paint, Expenses, half an half with your mate of course and Bob's ur Aunty….
You can sell an go your own way.. You can go again with the equity.. Keep it, split equity then go your own way….
Millions of options…. .
I can go on… lol
Good luck… although i dont think you'll need it… haha
Jef…………AJ, agree with the boys would try and maximise your borrowings whilst you can.
Assume you are employed rather than self employed?
If you are buying an IP you would also be able to factor in potential rent as an income although would need to take the corresponding rent / board liability as an expense.
Course without further hard data difficult to advise you further.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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