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  • Profile photo of ara1234ara1234
    Participant
    @ara1234
    Join Date: 2013
    Post Count: 3

    Hi Everyone,

    I am 23 and looking and getting into the Property market. I am earning around $90000 a year at the moment, my partner is on over $100000. i am looking at moving to Darwin for work.

    i have $30000 saved up for a deposit and im currently renting .

    I'm just looking for some advise what to do as i would like to buy my own house and an investment property within in the next year.

    just looking for some advise and possible strategies to archive my goal.

    Thanks  

      

    Profile photo of TheFinanceShopTheFinanceShop
    Participant
    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271

    Sit down with your broker or banker and crunch the numbers. In short, 'Pros' – you both have exceptional incomes so the sky is the limit in terms of what you can borrow. 'Cons' – you are deposit poor. Therefore the maximum you could purchase a house with a deposit of $30k (of this depending on which state you are buying in) would be somewhere around $325k-$330k. 

    There are a couple of strategies you can implement which can be determined once you have gone through each scenario and option. Based on the limited information above I would be ok with a high LVR loan for the IP. Basically the less deposit you use the better as you are young and sound like you have an aggressive IP strategy. Also since you are high income earners – you need you understand the importance of saving as may not hit the servicing wall but rather the deposit wall. LMI on the above scenario would cost you give or take $10k. 

    Regards

    Shahin

    TheFinanceShop | Elite Property Finance
    http://www.elitepropertyfinance.com
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    Profile photo of ara1234ara1234
    Participant
    @ara1234
    Join Date: 2013
    Post Count: 3

    oh k thanks for that,

    so ideally i need another 20 or 30 grand for my deposit

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hi and welcome aboard.

    I'm not sure if $300k is going to buy you much up in Darwin but the good news is that your high incomes should enable you to save up a larger deposit within a short time frame.

    I'd invest some time in educating yourself about property investing. Read widely and frequent forums like this one.

    When you're ready to purchase, you'll have a better idea of what it is your aiming to achieve and how you're going to  go about getting there.

    I like the idea of buying a home and then an IP. If you purchase a home you can add value to, you could potentially use this equity to delve into your first IP.

    All the best.

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    ara1234 wrote:
    oh k thanks for that,

    so ideally i need another 20 or 30 grand for my deposit

    It depends on how much you’re wanting to pay for your property as well as the LVR that you’re comfortable with (which ties in with how much mortgage insurance you’d have to pay).

    Some people don’t have an issue with using a 5% deposit and copping a large LMI premium while others are more risk adverse and prefer to come up with a larger deposit. There’s no right or wrong – just different attitudes to risk.

    I didn’t have an issue with using a 5% deposit on my fist property many years ago. That same property helped me establish my current portfolio.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of TheFinanceShopTheFinanceShop
    Participant
    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271

    What is the your price range (purchase price) and which state are you looking to buy in?

    Regards

    Shahin

    TheFinanceShop | Elite Property Finance
    http://www.elitepropertyfinance.com
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    Residential and Commercial Brokerage

    Profile photo of ara1234ara1234
    Participant
    @ara1234
    Join Date: 2013
    Post Count: 3

    Darwin, as prices are so high there i would be looking at anything up to 500, maby im dreaming about such being able to afford the repayments, but i need to do some serious research.

    Profile photo of TheFinanceShopTheFinanceShop
    Participant
    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271

    If you are looking to purchase something for $500k then you will need a minimum deposit of $51k and this is at a 95% plus LMI lend. Again servicing will not be an issue – its your deposit that needs beefing up. 

    Regards

    Shahin

    TheFinanceShop | Elite Property Finance
    http://www.elitepropertyfinance.com
    Email Me | Phone Me

    Residential and Commercial Brokerage

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    ara1234 wrote:
    Darwin, as prices are so high there i would be looking at anything up to 500, maby im dreaming about such being able to afford the repayments, but i need to do some serious research.

    Without knowing the specific of your situation, your incomes alone should place you in a good position to meet the repayments on a $500k mortgage.

    Having said that, I don't know what your spending habits or existing liabilities look like.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of JpcashflowJpcashflow
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    @jpcashflow
    Join Date: 2007
    Post Count: 575

    Wouldn't ARA require funds for stamp duty as well?

    Jpcashflow | JP Financial Group
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    Your first port of call in finance :)

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Yeah I think the $51k mentioned above was to cover the min deposit plus costs.

    Just be careful if taking out a 95% lend above $500k – the LMI will be through the roof and depending on the lender, may not be able to be capped above 97% LVR in total.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of JhaiMitchellJhaiMitchell
    Member
    @jhaimitchell
    Join Date: 2012
    Post Count: 30
    ara1234 wrote:

    I'm just looking for some advise what to do as i would like to buy my own house and an investment property within in the next year.

    just looking for some advise and possible strategies to archive my goal.

      

    Before you sort out all of the loan issues (which sound like you will not have a problem) you need to decide what sort of investor you wish to become?

    Do you want to invest for Pos­it­ive Cash flow, Neg­at­ive cash flow, ren­ov­ate & sell, Sub­divide or develop. These strategies are very dif­fer­ent from each other and require a dif­fer­ent skills set.

    Of course you can learn these skills sets but you first need to mas­ter one strategy before mov­ing onto some­thing different.

    For more information check out this airticle 9 Steps To Successful PROPERTY INVESTING.

    Profile photo of TheFinanceShopTheFinanceShop
    Participant
    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271
    Jpcashflow wrote:
    Wouldn't ARA require funds for stamp duty as well?

    On a purchase of $500k in NT you are looking at approx $20k in Stamp Duty and $15k in LMI. The total funds required would be approx $535k. 

    At a 97% lend your loan amount will be $484k so the difference between this and $535k will give you the deposit amount required which is $51k. You also need to add legal fees of approx $1,500 and building and pest inspection of approx $500 into the equation. 

    Regards

    Shahin

    TheFinanceShop | Elite Property Finance
    http://www.elitepropertyfinance.com
    Email Me | Phone Me

    Residential and Commercial Brokerage

    Profile photo of wilko1wilko1
    Participant
    @wilko1
    Join Date: 2010
    Post Count: 510

    Depending on your strategy and how aggressive you want to be in building your portfolio and your risk levels. You could take a personal loan out for your deposit on your IP. Your high incomes would easily support a personal loan of 50k which could could be used to purchase a high cash flow property or some sort of buy renovate/develop sell property. (not advising you to do such a thing but you could if you wanted to). Transfer P/loan from Bank A into Bank B. Hold for 3 months in Bank B (providing they only need 3 months statements of accounts) and suddenly you have 50k of assets. You also declare you have a existing personal loan of 50k. You would also add further money through saving into this account during that time period. IF you didn't want to wait 3 months and you wanted to buy NOW, found deal a lifetime type of scenario . Use your personal Loan money and pay a 10 % deposit. 50k for your 500k house. Not sure if anyone wants to confirm this. But some banks will go ok great you've put 50k towards this deal already ohh and you have a personal loan of 50k listed on your liabilities (how do we not put 2 and 2 together). You now only need 1k to settle. Assuming the 51k 95% with LMI up to 97% capped as before.

    On another note. Trying to get a personal loan out to pay the shortfall on a property you've signed to purchase after you have paid the deposit the banks will go No you cannot use personal loan money to pay for your shortfall. But yet somehow if you paid a bigger deposit beforehand even with the personal loan its ok? The bank you use to get your home loan with should be different then your P/Loan bank. 

    Your goals will determine your strategy. I'm not advising to do the above. But in saying that if you were going to wait 6 months to save up your money but you have found a property that you can renovate and sell and make 10,20,50,100k today, i don't see why you would wait (obviously for risk purposes). You would lose you opportunity cost for the remainder of the year after you had completed the renovation/development.  If you were buying a property to buy and hold long term then that strategy would properly not be that advisable. After all what is waiting 6 months for a property that you are looking to own for 10-15 yrs or the rest of your life.

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