All Topics / General Property / Large loan or Small loan

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  • Profile photo of jeeakz7809jeeakz7809
    Participant
    @jeeakz7809
    Join Date: 2022
    Post Count: 0

    Hi all, I am pretty new here. And I have a little knowledge of investing in property.

    I have a question. Currently, have a loan of $350 k with a bought property two years ago. And this will return equity of $85k for today ( as the broker told me)

    I am targeting to refinance and use the equity to purchase another property. As I am a full-time employee. My question is here either buy a property worth $450k above ( which my borrowing capacity allows me ) off the plan house or buy an existing house worth up to $220k. Is there any advantage to buying a house with $450k- 600k off the plan or staying with a small existing  $220k which might be rented for $260 per ( no other cost calculated ) .

    Off the plan or existing house. Which one do you think is a better option in today’s market?

     

    I thank you for your answer, I am sorry for my less wisdom in this.

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,416

    Hi jeeakz,

    Hmm, is this the same jeeakz that posted THIS topic a few months back? If so, I’d added some thoughts in reply, but didn’t hear back from you to help further.

    https://www.propertyinvesting.com/topic/5082995-i-need-an-investment-strategy-for-my-situation-2/#post-5082995

    The name is right, but the scenario outlined in each post seems WAY different.   Anyway, lets concentrate on today’s question :-

    Off the plan or existing house. Which one do you think is a better option in today’s market?

    For me, the answer is always “existing” for several reasons.  You mention one, which is that the return (or yield) is likely to be way better.  But there are many others – see the link below for some ideas re why NOT to buy OTP.

    https://www.propertyinvesting.com/buying-investment-property-off-plan-dumb/

     

    And, should you choose to buy OTP anyway, read THIS link before signing on the bottom line:-

    https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/page/3/#post-5038486

    While in this last link, do have a look around – especially hte very first post on page 1 as it outlines all the subjects referred to in the topic, and some of them may well answer a heap of questions for you.

    Any questions, reply here and let’s see what we can do….

    Benny

     

    LauraH
    Participant
    @laura-holand
    Join Date: 2022
    Post Count: 0

    You may consider investing in a small existing property than having large loans. One primary advantage of buying an existing property is the lower cost. Of course, this will still depend on the location, the property type, and other factors, but established properties are generally more affordable than new properties, which means that you may be at less risk of facing mortgage stress levels.

    LauraH | Mole Patrol LLC
    https://www.molepatrolkc.com/

    Profile photo of SanaiCoffeySanaiCoffey
    Participant
    @sanaicoffey
    Join Date: 2023
    Post Count: 0

    When it comes to choosing between an off-the-plan house or an existing one, there are a few things to consider. Off-the-plan houses often offer the advantage of customization and potentially higher capital growth. On the other hand, existing houses have a proven track record and you can assess their value more accurately.

    Profile photo of SanaiCoffeySanaiCoffey
    Participant
    @sanaicoffey
    Join Date: 2023
    Post Count: 0

    Given your borrowing capacity, it’s important to carefully weigh the potential risks and returns. To get expert advice tailored to your specific situation, I suggest reaching out to a good Mortgage Broker in your area. They can provide valuable insights and help you make an informed decision based on your financial goals and market conditions.

    • This reply was modified 7 months ago by Profile photo of Benny Benny. Reason: Remove advertising
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