Hey guys,
I am new to property investment and looking at buying my first investment property but have no idea if I have enough equity or how much I need etc. I want to buy a townhouse around the 280k mark, I have my own house that got valued at 450k month or so ago and i owe 405k on it so 10% equity which is 45k. Is this enough to buy a 280k investment property or do I need more? Any help greatly appreciated!
Hey guys,
I am new to property investment and looking at buying my first investment property but have no idea if I have enough equity or how much I need etc. I want to buy a townhouse around the 280k mark, I have my own house that got valued at 450k month or so ago and i owe 405k on it so 10% equity which is 45k. Is this enough to buy a 280k investment property or do I need more? Any help greatly appreciated!Hi Dan,
If your existing equity is only 10%, doubt you could use much of it, if it all. I personally wouldn’t bother unless the new valuation is much higher?
To buy an IP at the $280k mark, you would need at least 5% + the purchasing costs (which I usually calculate as 5%) = 10% = 28K.
Hope this helps? :-)
Cheers,
EthanEthan Timor | Aligned Finance Pty Ltd
http://www.alignedfinance.com.au/
Email Me | Phone MeActive Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)
Hi Dane,
Ethan’s comment “If your existing equity is only 10%, doubt you could use much of it, if at all” is good comment.But if you want to know WHY that is so, do check out this post,
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/page/2/#post-5023105and click the link within it to learn even more. Once you see some examples, it will become a lot more clear,
Benny
I believe banks will let you use 80% of equity, some 90%
So 450-405=
45k x .8 = 36kJust my understanding.
Best advise I can give is get in touch with a good mortgage broker who can really help you out.
The calculation is a bit different. 80% of 450k = 360k. Since the OP mortgage is already higher, that’s not an option. Need something like 95% and take LMI into consideration.
Definitely agree that best speak with a professional. It’s free and useful 😊
Ethan Timor | Aligned Finance Pty Ltd
http://www.alignedfinance.com.au/
Email Me | Phone MeActive Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)
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