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Query about a future investment

Discussion in 'General Property Chat' started by Melb.F, 24th May, 2016.

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  1. Melb.F

    Melb.F Member

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    24th May, 2016
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    Hi Everyone,

    This is my first post to this forum however, I'v been visiting this forum for few weeks. I want to buy an investment property but I am not sure if my current financial situation let me do that.
    Our household income is 155k before tax and we are saving 3.5k per month after all expenses.
    We have a PPOR with 80% LVR and the property worth 650k.
    my current saving is 60k.

    Do you think that we are in a position to buy an investment property or we need to save more money before thinking about it.
    I am thinking about an investment property with the price range of 400k, house or unit 2 bedroom or more in an area with a good CG potential. I know 400k is not much but if I can get into the market now is better than next year or so but that's a big IF.

    Cheers
     
  2. D.T.

    D.T. Adelaide Property Manager Business Member

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    I think you need to have a better look at what you're trying to achieve and do things toward that. Make sure you're not just buying property cuz it's 'cool'.

    One option (and there's many) might be to sink 50k (keep 10k aside as a buffer) into the home loan and then top the ppor up to 90% as a separate account. If I'm understanding your numbers correctly this should give you around 110k to play with. This could be deposit on 1 or 2 properties depending on what you're trying to achieve.

    I had Corey Batt do something similar for me, its called Debt Recycling and enables you to reduce your bad debt and increase your good debt in turn getting you into more properties.

    Where are you thinking of buying?
     
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  3. LifesGood

    LifesGood Home Building & Development Consultant Business Member

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    Hey @D.T. could you please elaborate on this? I don't quite follow.

    One option (and there's many) might be to sink 50k (keep 10k aside as a buffer) into the home loan and then top the ppor up to 90% as a separate account. If I'm understanding your numbers correctly this should give you around 110k to play with. This could be deposit on 1 or 2 properties depending on what you're trying to achieve.
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Pay down bad debt and reborrow to invest - which is good debt as it is tax deductible.
     
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  5. LifesGood

    LifesGood Home Building & Development Consultant Business Member

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    Ah right, so the new top up is claimed as an investment expense. I see now.
     
  6. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Hi @Melb.F

    Welcome aboard.

    I haven't crunched the numbers but a $400k IP seems doable based on your numbers.

    First thing I'd do is order a couple of upfront valuations on your PPOR to see how much equity you have available.

    If your willing to use some of those savings towards the IP - I'd look to inject the funds into your PPOR loan re borrow (as mentioned above) to cover the deposit costs.

    All in all - best to get some pro advice.

    Cheers

    Jamie
     
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  7. Melb.F

    Melb.F Member

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    Thanks, I think about this option,
    I want to buy in Melbourne