My Property Investment Journey - Week by Week

@Jose Eduardo Slompo as I read your journey I keep having questions, why did you start far from the city and with each purchase you moved closer?

 

I started going for 10% deposits, which naturally increased the total purchase price I could afford.

 

Did you have to pay insurance? Was it worth it?

 

when the market is raising like crazy its worth going for 10% deposit... LMI is nothing if it means you can get a lot early in the market... one month of growth will easily pay your LMI and some more....

 

That was exactly my thinking. For properties 3 and 4 I needed to get in quickly as the boom was starting, so I went for 10% deposits plus LMI. Hurts serviceability more than 20% would, but I think it was a good trade-off.

 

Thanks, makes sense, seems like you did the right thing... Do you know how bad it impacts serviceability?

 

I would imagine it's just the additional money you're borrowing. I don't think there's any additional "penalty" to your serviceability simply because it's a 10% deposit.

Does anyone following the thread know this for sure?

 

just the extra money youre borrowing... no penalties... lenders only care about how much you owe and how much you have for income...

 

That's what I'm thinking too, but would be great to have an actual broker confirm it. Unless you're a broker @Marcio_S?

 

Spoke to my broker and there's no direct impact apart from the obvious one (more money being borrowed). There's an indirect effect though: smaller deposits usually attract a slightly higher interest rate, which will naturally impact serviceability.

 

Thanks a lot! Very helpful!

 

@Jose Eduardo Slompo more questions from reading your journey... do you think it made a difference to advertise your properties as pet-friendly?

 

not a broker... but you spoke to you broker and he confirmed what i said... been on this for a long time my friend...

tight rental market now... pet friendly wont make a difference... but in normal market it does... can charge a bit more rent... just make sure rental agreement covers cleaning and fumigation when tenants leave and youll be fine...

 

Yes, it did, but only for my first two properties, when the market was slow. More recently, with the super tight vacancy numbers, I don't think it made any difference at all. I still advertised them as pet-friendly because I'm a dog-lover renter and I know sometimes it can be quite hard to find landlords that accept pets, so I decided I would accept them even if it wouldn't make a financial difference.

Anecdotally, I tend to think that tenants with pets look after the house better, but that might be just my personal bias towards pet-lovers.

 

Back to 10% deposit with LMI, found this good read:

https://propertyupdate.com.au/how-do-i-know-if-lenders-mortgage-insurance-is-worth-the-cost/

 

good article... but nothing new there... everything we had already said...

 

Tks for sharing, @Mr Clueless. I'm subscribed to Michael Yardney's daily posts and remember seeing this one some time ago. As @Marcio_S said, it's in line with what we had said.

MY's daily posts are usually repetitive and salesy, but there's definitely some good pieces here and there if you sift out all the sales stuff.

 

Just found this article which is aligned with what you said:

Pets in Rental Properties | EBM RentCover | Landlord Insurance

Hope it's ok to share articles in your thread @Jose Eduardo Slompo this is the second already today

 

Good article, sums up my thinking

 

ebm is good value for money... i have all my landlord insurances with them