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Equity now available.....

Discussion in 'General Property Chat' started by jordy, 14th Jul, 2016.

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  1. jordy

    jordy Active Member

    Joined:
    22nd Jun, 2015
    Posts:
    30
    Location:
    Brisbane
    Hi All,

    Our situation currently

    PPOR $640k Value- $450K Loan P & I
    IP 1 $480k Value- $340k Loan IO Rented out at $430 Per week
    Have $50 000 in savings which we will use for IP 2

    With PPOR recently valued at 640k my broker has said I have around 62k useable equity for IP3.

    My question is what are the pros and cons on building a brand new house opposed to established we are considering land in Ripley or buying an establishment property in Bellbird Park or Kallangur. Our budget is around 350k.

    We are willing to use some of our cash if need be.


    Jordan
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,756
    Location:
    Perth WA
    Please don't use your cash for the IP deposit - you also have equity in your IP you can use, as well as a trick with your PPOR that will allow you to borrow for the IP rather than use cash.

    Paying the cash into the PPOR, splitting and redrawing is a much better way to fund a deposit than using cash - it reduces your non-deductible debt and increases your deductible.
     
    Greyghost and Leo2413 like this.
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
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    Location:
    Gold Coast
    Pros for new H&L could be

    Depreciation
    Lower Maintenance
    Get to build what you want


    Cons could be


    No income while holding land and building
    usually smaller land size
    less tennant desireability
    Newer stock tends to grow at a slightly lower rate, at lease for a few years.


    really does depend on the location and new land supply and current sales. Many outlying burbs suffer from H&L pack vals that are lower than actual cost due to one year resales.

    ta
    rolf