Buying first investment with LVR >80% - worth it, or save more first?

Discussion in 'Financial Planning' started by millie29, 30th Jun, 2021.

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  1. millie29

    millie29 Well-Known Member

    Joined:
    27th May, 2021
    Posts:
    155
    Location:
    Sydney
    I’m looking to purchase my first property, an interstate investment, however due to stamp duty and buyers agent fees, I will only have a deposit of 12-13% depending on the final price of the property.

    Given that my mortgage repayments will be higher as a result of this, and it will take me longer to build equity in the property- Is it worthwhile going ahead? I have crunched the numbers and I should be able to service the loan without difficulty (rental income should cover most of it), however I would be out of pocket for ongoing costs such as insurance, council etc (I have budgeted around $5k per year for this). I do fear though that if I continue to save a bigger deposit, I will miss out as prices continue to increase.

    General thoughts? Anything else I should take into consideration?
     
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,599
    Location:
    Gold Coast (Australia Wide)
    3 questions

    Where ?

    How long till you can buy with an 80 % lend ?

    IO or PI loan

    ta
    rolf
     
  3. millie29

    millie29 Well-Known Member

    Joined:
    27th May, 2021
    Posts:
    155
    Location:
    Sydney
    Brisbane surrounds (absolute max budget is 500k)
    Probably another 3 years
    P&I investment loan


    I also note that I’m now currently in a personal situation where I have no other commitments and super low expenses, which is why personally I would like to buy now. In 3 years time I would like to have kids, which is an expense in itself and means maternity leave etc.
     
    Last edited: 30th Jun, 2021
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,599
    Location:
    Gold Coast (Australia Wide)
    There is your answer.

    Possibly now or very much later

    ta
    rolf