Investment - Where/When to start?

Discussion in 'Investment Strategy' started by westbound, 16th Jun, 2020.

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  1. westbound

    westbound Member

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    15th Jun, 2020
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    I am a owner occupier(currently at 80% lvr for a 550k property) whose job situation has changed hence putting some extra cash in pocket. I want to be able to enter into property investment be able to slowly supplement my income, which I hope will eventually lead to some financial independence and lesser dependence on my job salary.

    I am not sure how much do I need to save to get my feet in the door. I currently have a very low risk appetite and hence would rather save more and take up a safer investment with minimal gains than risk it something which is high risk and high gain.

    So I am looking for some insights from the experts here to try and understand what is the minimum one should save to get into the game?
     
    westbound, 16th Jun, 2020
    #1
  2. Morgs

    Morgs Well-Known Member Business Member

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    Risk is a very individual thing.... in theory you could get into an investment with as little as 5% deposit + stamp duty / costs / LMI and but does that fit within low risk?

    Or does working to a 20% deposit + costs for the investment purchase lower risk?

    Either way would be good to try and exhaust options to extract equity on the existing OO for the deposit once you're clear on the strategy.
     
    Last edited: 17th Jun, 2020
    Morgs, 16th Jun, 2020
    #2
  3. westbound

    westbound Member

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    Does this mean get as much equity as possible from the current OO?
     
    westbound, 16th Jun, 2020
    #3
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Hiya WB

    Not knowing much of your detail circumstances and goals, id suggest what Morgs has said, and do a valuer shop, to get the highest val to draw the max loan new split loan amount

    Was the loan always at 80 % or did you pay lmi at purchase ?
    Are the loans fixed at all ?

    I would also look at an active debt recycle strategy so u can pay down the Non ded PPOR debt more quickly, and also diversify your asset base.This will speed you towards your reasonable stated goals of some financial independence and lesser dependence on your job salary.

    ta
    rolf
     
    Rolf Latham, 17th Jun, 2020
    #4
  5. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    Perth WA + Buderim Qld
    The minimum one CAN save is about 12% plus stamps for an investment. That said, you can use equity in your home for the deposit and keep your cash in an offset against your home.

    If you've got a very low risk appetite, make sure you educate yourself thoroughly before diving in...at the end of the day, an uneducated decision is likely to be the biggest risk to your investment success.
     
    Jess Peletier, 17th Jun, 2020
    #5