First investment property

Hi all,

It's great to see so many people helping each other in this forum. I tried to find a similar thread to my question however I couldn't find one and hence this question.

I currently own a property and reside there with an outstanding debt of 420k in the western suburbs of Melbourne. I'm looking to buy an investment property something in the range of 500k to 600k. I will have a repayment capacity of 2 - 2.5k.

Where would be the best place to get an investment property that will appreciate over time for this range?

Thanks!

 

Get your loans sorted out first and make sure you understand it. Are you refinancing your ppor for the deposit? Cross coll? Have a mortgage broker? Whose name do you buy in?

Does repayment capacity mean thats what your saving now? If so where are your savings currently going? Offset account? Paying down mortgage? Savings account?

Lots of thing to consider before the property itself. What will you refuse to invest in? Some people dont like old properties. Some want land, some think units mean less maintenance. Some will only go so far from the cbd. Are you handy and can renovate? You ok with buying interstate?

You cant just ask whats good because you will have too many options.

 

If only it was that simple hey?

This reminds me of the prospect who rings his stock broker and says, “look you have shares that go up and shares that go down right?”
The stock broker replies, “Yeah, that’s right”. The prospect says, “Well I have some money to invest in shares, but I only want to buy the ones that go up, ok!”

There are many more questions to be asked and answered, before anyone can suggest possible locations and property types. But this can be done.

 

Thanks for your reply. I don't have a mortgage broker yet. I may buy in in my name and my partner's name with 99% and 1% equity.

With repayment capacity I meant based on the monthly cash flow to the mortgage. I have the 10% - 15% cash deposit for the purchase.

All my current savings are in my offset account.

What I will refuse to invest in would be the one that requires lots of renovation. Less reno is fine. I'm not handy too.

Not sure of the challenges with interstate. Is it doable with no experience of managing an investment property before?

Thanks

 

Glad to know that it can be done and I understand there are lot more questions to be answered. Is that something that we can discuss here?

 

Yes, it is an open public forum. If you need specific (from professionals like brokers, lawyers, solicitors, financial planners, buyers agents, etc.) advice related to your personal situation, then you're better off taking your discussion off-line. Some of the specific advice you might have to pay fees for.

 

There have been threads on the forum here about how people manage interstate purchases either on their own, or with a local (to the area you are buying in) buyers agent.

Try this search: Search Results for Query: "buying interstate" | PropertyChat

 

As @Propertunity says, chat to a buyer's agent. They can create a team around you including mortgage brokers, buying specialists, conveyancers etc, so you can start your investment journey without making all of the typical mistakes that we made when we started.

Very good time to be thinking about this. And yes, this forum is a good place to start.

Good luck.
John

 

Before you speak to a BA, please have a chat to a broker as the finance side of things is more complicated than you imagine - especially at the moment!

While you consider that you have a spare $2500 to contribute to the property, the bank may take a very different view so best to work with a broker who can look at your full scenario and advise you the best way forward.

From what you've written, 10-15% may be cutting if fine when considering stamp duty/buying costs, and the fact most lenders like a maximum LVR of 90% inclusive of mortgage insurance premiums.

 

Speak to bank first.
Or broker if you don't have a relationship manager at a .

I agree at the moment.work out what you can borrow is important. BA are good.
Especially while you are new. After that you probably will be good in your own .

Best of luck.

 

Thanks for your advise and I do have a pre-approval from bank and it's based on that I quoted the range of 500k-600k as my buying capacity.

 

Good to know. I'll get in touch with a BA then.

 

Any BA you can suggest in Melbourne? What's would be their charge roughly to get an idea - a range would be good too?