How to structure finance for first IP

Hi everyone,

I'm looking to buy my first property in Melb which I'll use as an IP . I'm looking at spending up to 540k with deposit of 100k resulting in LVR of approx. 88% (which unfortunately incurs LMI of 5k). My goal is to build a property portfolio by building equity whether organically or through cosmetic updates.

But in order to do that, I need to first set up and structure my finance appropriately for the first IP. Just wondering if anyone has any tips for structuring and setting up finance in a way to best accommodate this strategy? I've consulted with my accountant and broker and the below list is my plan at the moment... but not sure if this is the best or right approach.

Keen to hear your thoughts - is there anything I should reconsider or add?
- Borrow to my maximum limit (purchase price of 540k)
- Variable rate of 4.32% across 100% of home loan
- Offset account with salary paid into the account
- Unfortunately P&I is the only option at this stage
- Landlord and income protection insurance

Thanks,
Andy

 

All makes sense

Consider using a lender that will allow you to access equity without too much hassle in the future.

Cheers

Jamie

 

Why Melbourne?

 

Be careful of borrowing to your limit - you need capacity available to access equity and go again.

Also be careful of chasing low rates - if that rate is for investment, I'd bet you'll have trouble getting cash out to go again.

Because your paying lmi it's super important to get this lender right.

Lastly, choose your broker wisely. You need to make sure they are all over investment lending or you'll find yourself stuck much sooner than you need to be.