Portfolio Advice

Hi all,

This forum has been a great source of information & inspiration and hence asking for some more advice here from experienced members.

Current portfolio:

• PPOR in Sydney - Valued around $900K
• 2 Bed Unit IP in Sydney - Valued around $700K, Rent $550 per week
• 2 Bed Unit IP in Central Coast - Valued around $400K, Rent $330 per week

Family income is around $300K and expected to keep growing. No other debts than mortgages.

We have 25% equity in the portfolio and everything is financed by Commbank.

Recently my wife has moved into a permanent role at one of the BIG 4s (other than Commbank) and they have offered us a better staff interest rate if we move our banking to them. Their staff rates are fairly generous compared to an already discounted rate with Commbank. The thing that has interested us the most is that the bank has the policy to finance at 90% LVR for staff without any LMI. This also means our ability to borrow more money is now just limited by our borrowing capacity which is already high due to high income.

We feel that moving the mortgages with them is a no brainer due to lower rates and other staff perks but not so sure about increasing the LVR. The advice from couple of family members is to go on a investment spree and add up to $1.5-2 million in property investments.

Thoughts?

 

I think it all comes down to your risk profile and goals. If your appetite for risk can handle more debt, growing your portfolio further and at a faster rate that is also in line with your goals then I don't see why not. If not, then reassess your goals and risk acceptance, then base your decisions on those factors. That would be my approach.

 

Are you considering taking the existing loans up to 90% and releasing some equity or just purchasing the next properties at 90%?

If the former - do you know if your wife's bank is ok with 90% LVR equity releases? Most big 4 are ok - but some will expect to see a contract of sale or other proof of what the funds are being used for.

If you're not increasing the current loans - and are just refinancing for rate. Let CBA know what's on offer before jumping ship. They're quite competitive and don't like to lose business.

Cheers

Jamie

 

They told us that we could release equity to bring the whole portfolio to 90% LVR so essentially borrow up to another $3 million depending upon wherever our borrowing capacity takes us to.

Yes. I will double check though.

 

Let me see if I got this right.

You're pulling in 300K pa plus rental income?

Your debt is 1.5 mill

So your repayments on mortgage are about 80K pa.

Conclusion: the world is your oyster.

 

No that's combined family income other than rental income. Gross rental income from two IPs would be $40K per annum.

 

What's your family yearly expenses. Start with cost of living and see what's left to invest.

 

Wish I had your problem

Easy for me to say, but, I would probably keep what you have now where it is, just get best rate you can, and buy using the staff offering.

With that income you could do so many things anyway, with the staff discount, seems a no brainer.

 

Follow Jamie's advice

In your shoes, but with my goals, if I could top everything up to 90% and not pay LMI, I'd do just that, pop the new money in offsets and use some of it to expand my portfolio (while keeping enough of a buffer to weather future storms, and sleep well at night).

 

I didn't realize they sold Rolex Oyster watches in the Druie?

I thought most of it was Chinese poor quality knock-offs....called Rolei Oister

 

lol Sash you're ruining my rep.

 

I know seriously dude....you have gotta stop wearing those pouncy Michael Kor Mother of Peal watches...that will get you hiding in the Druie...just not done....

Mother of Pearl Women's Watches | Overstock.com: Buy More Brands Women's Watches, Burgi Women's Watches, & Akribos XXIV Women's Watches Online

 

Makes sense, keep buying, increase debt, ignore market conditions, friends know best, if all else fails I make a paper loss. hold the suckers for 20 years and am sure to be in front and everyone is happy cos I eventually made a profit

 

Thanks - this is the advice we really like. Cheers

 

If you want any hope of continuing to grow your portfolio...you need balance growth and yield.

The preference is to buy properties which are 5-7 out of 10 with a 5-6% yield initially with a view to getting to a 7-8% yield in 3-5 years. Also need properties which grow 6-7% over the long term.

 

yes, agree 100%.

My strategy has been to go with a minimum 5% gross yield. It's now hard to achieve in Sydney and surrounds so might have to go to other states.

 

Yep...one of reasons why to stay away from Sydney.....but will be interestng post election. Seeing some apartments heading towards 5% on the Northshore.

 

how's ur builds going sash

 

Which suburbs?

 

Mickleham ....slab down in early May......frame almost done...they are flying through it.

Waiting on contracts for Geelong and Officer Builds. Officer land settlement is now Sep 2016.