Join Australia's most dynamic and respected property investment community

Portfolio Advice

Discussion in 'General Property Chat' started by standtall, 17th May, 2016.

Tags:
  1. standtall

    standtall Well-Known Member

    Joined:
    19th Oct, 2015
    Posts:
    273
    Location:
    Sydney, NSW
    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?
     
  2. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,858
    Location:
    Sydney
    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.
     
  3. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,162
    Location:
    Canberra and Sydney
    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
     
  4. standtall

    standtall Well-Known Member

    Joined:
    19th Oct, 2015
    Posts:
    273
    Location:
    Sydney, NSW
    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.
     
  5. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    1,394
    Location:
    Mt Druuiitt
    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.
     
  6. standtall

    standtall Well-Known Member

    Joined:
    19th Oct, 2015
    Posts:
    273
    Location:
    Sydney, NSW
    No that's combined family income other than rental income. Gross rental income from two IPs would be $40K per annum.
     
  7. Barny

    Barny Well-Known Member

    Joined:
    16th Oct, 2015
    Posts:
    1,186
    Location:
    Melbourne
    What's your family yearly expenses. Start with cost of living and see what's left to invest.
     
  8. dabbler

    dabbler Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,730
    Location:
    Sid en e - olympic city
    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.
     
  9. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    2,458
    Location:
    Sydney & Gold Coast
    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).
     
    standtall likes this.
  10. sash

    sash Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    3,214
    Location:
    Sydney
    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
     
    datto likes this.
  11. datto

    datto Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    1,394
    Location:
    Mt Druuiitt
    lol Sash you're ruining my rep.
     
  12. sash

    sash Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    3,214
    Location:
    Sydney
    datto likes this.
  13. MTR

    MTR Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    7,533
    Location:
    Perth, Melbourne, USA
    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:)
     
    Wukong likes this.
  14. standtall

    standtall Well-Known Member

    Joined:
    19th Oct, 2015
    Posts:
    273
    Location:
    Sydney, NSW
    Thanks - this is the advice we really like. Cheers :)
     
  15. sash

    sash Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    3,214
    Location:
    Sydney
    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.
     
    standtall likes this.
  16. standtall

    standtall Well-Known Member

    Joined:
    19th Oct, 2015
    Posts:
    273
    Location:
    Sydney, NSW
    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.
     
  17. sash

    sash Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    3,214
    Location:
    Sydney
    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.
     
  18. melbournian

    melbournian Well-Known Member

    Joined:
    2nd Sep, 2015
    Posts:
    1,332
    Location:
    melbourne
    how's ur builds going sash
     
  19. standtall

    standtall Well-Known Member

    Joined:
    19th Oct, 2015
    Posts:
    273
    Location:
    Sydney, NSW
    Which suburbs?
     
  20. sash

    sash Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    3,214
    Location:
    Sydney
    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. :(