All Topics / General Property / Investment advise needed

Viewing 11 posts - 1 through 11 (of 11 total)
  • Profile photo of Harmony25Harmony25
    Member
    @harmony25
    Join Date: 2013
    Post Count: 5

    My situation is as follows

    PPOR. Valuation 630k. Loan 360k
    IP. Valuation 400k. Loan (separate, different bank) 300k yield 5.15%

    Combined income gross $190k pa

    My question is is it wise to invest in another IP? We are in the late 40s and a bit concerned taking on further debt.
    Please share your thoughts.
    Thank you
    Joe

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

    Hi Joe

    Welcome aboard.

    On the surface your borrowing capacity and available equity looks fine. With the right structure you could potentially purchase multiple IPs.

    Whether you should or not depends on your long term plans and what you're aiming to achieve. Your tolerance to risk also plays a part.

    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 Harmony25Harmony25
    Member
    @harmony25
    Join Date: 2013
    Post Count: 5

    Hi Jacqui,
    Thank you. I dont intent to do it through super.What I am looking for is to structure it outside as part of my portfolio with a rental yield of over 5% with good capital growth.
    Joe

    Profile photo of Harmony25Harmony25
    Member
    @harmony25
    Join Date: 2013
    Post Count: 5

    Hi Jamie,
    Thank you. My intention is to enjoy the capital growth over the next five years and sell it. I don’t want to go over $400k.
    Joe

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    Harmony25 wrote:
    My situation is as follows

    PPOR. Valuation 630k. Loan 360k
    IP. Valuation 400k. Loan (separate, different bank) 300k yield 5.15%

    Combined income gross $190k pa

    My question is is it wise to invest in another IP? We are in the late 40s and a bit concerned taking on further debt.
    Please share your thoughts.
    Thank you
    Joe

    It may be wise to invest if you think you can make money. You appear to have plenty of income and equity, enough to do some more investing.

    What concerns you about taking on more debt?

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Harmony25Harmony25
    Member
    @harmony25
    Join Date: 2013
    Post Count: 5

    My major concern is employment, what happens if one of us loses job.?

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Hi again Joe

    It is always a very nice thing to keep a substantial cash buffer in an offset account.  This helps you save on mortgage interest but is also a supply of readily-available cash in the event of scenarios such as periods of unemployment.

    This can be achieved by going for a higher LVR, thereby keeping funds in your control rather than handing them over to the bank in the form of large deposits.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    Harmony25 wrote:
    My major concern is employment, what happens if one of us loses job.?

    In that case you have to plan for it. What would happen cashflow wise for example – hopefully a rented property wouldn’t be costing you much money per week. How easy would it be for either of you to find a new job, how long would it take for example.

    I have a friend with one unencumbered investment property and a main residence at 80% LVR, yet he is terrified of ‘risk’. He won’t invest at all. He only ended up with a new main residence because of moving interstate for work.

    I also know people who are buying their 5th property on 90% LVR loans. Much more risky yet they don’t worry (openly any).

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    You can insure against anything these days include unemployment, redundancy, death etc however it all comes at a cost.

    All depends if you want to one live off your rental income one day or merely float along with the herd.

    Nothing wrong with the later but sometimes you had to expose yourself to some element of risk to move forward. 

    Getting up each day can be risky but it is a risk i am prepared to take.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    0-40 Properties in a decade with an unencumbered value of over $35M. Email for a copy of my API article

    Profile photo of Shiny_Suit_ManShiny_Suit_Man
    Participant
    @shiny_suit_man
    Join Date: 2012
    Post Count: 54

    Have you been to see a financial adviser at all?  One of the first things they may mention to you is to look into some life insurance and income protection so you are covered with your investments should you be out of work.  On top of this you can shape your portfolio to be as passive or aggressive as you feel comfortable with.  It really depends on what you are looking to gain from your portfolio which should determine how aggressive you choose to be.

    Good Luck.

    -SSM

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Hi Joe

    Welcome to the forums!

    The first and most obvious question is, are you contemplating another IP purchase in your own names, or are you contemplating setting up a Self Managed Super Fund and using your superannuation money as deposit and buying costs on the IP?  I'm guessing you'd have sufficient funds in your super to fund a hefty deposit on at least two properties, and with the correct yield, they'd be paying for themselves, such that they'd be paid off by the time you're retired.  Hello tax-free rental income!  smiley

    5.15% is a bit on the low side for yield – certainly when you are no doubt wanting the properties to be debt-free or close to it by the time you hit retirement age.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

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