Hi everyone,
I'm sure this subject has been dealt with over and over, but my topic has more than one aspect to it.
Let me first describe my situation.
In January of this year, I bought my first home for $415,000 and borrowed 80% of that from NAB, while having a deposit of $83,000.
Now I'm looking into purchasing an investment property and hopefully start building a portfolio. I have been told by my real estate agent that my house has risen in value since a similar house in my street has been sold for $450,000. I still owe $325,000 on my mortgage.
1. Does this mean I've got $125,000 in equity?
Now I'm looking into buying a low rise flat. I've looked around and found that Lakemba seems to be a good investment suburb. The average price of a two-bedroom unit is $200,000 with rental returns of about $300/week. I've already read it has very low vacancy rates.
2. Is my line of thought financially sound from an investment point of view?
If I take out $100,000 in equity and place it as a 50% deposit on a $200,000 unit, the mortgage of $100,000 (remaining) on the unit adds up to about $200-$250/week in repayments, which is less than the rental yield. Then, I could increase my repayments to finish off the small mortgage and expand my investment properties.
3. Does this sound like a good strategy?
4. If so, how long should I wait before I take the first step?
5. If not, how else would you go about this and how would you make the best of the equity on the house?
I am a newbie so any advice/tips would be greatly appreciated.
Thanks in advance,
Sirius
I'm sure this subject has been dealt with over and over, but my topic has more than one aspect to it.
Let me first describe my situation.
In January of this year, I bought my first home for $415,000 and borrowed 80% of that from NAB, while having a deposit of $83,000.
Now I'm looking into purchasing an investment property and hopefully start building a portfolio. I have been told by my real estate agent that my house has risen in value since a similar house in my street has been sold for $450,000. I still owe $325,000 on my mortgage.
1. Does this mean I've got $125,000 in equity?
Now I'm looking into buying a low rise flat. I've looked around and found that Lakemba seems to be a good investment suburb. The average price of a two-bedroom unit is $200,000 with rental returns of about $300/week. I've already read it has very low vacancy rates.
2. Is my line of thought financially sound from an investment point of view?
If I take out $100,000 in equity and place it as a 50% deposit on a $200,000 unit, the mortgage of $100,000 (remaining) on the unit adds up to about $200-$250/week in repayments, which is less than the rental yield. Then, I could increase my repayments to finish off the small mortgage and expand my investment properties.
3. Does this sound like a good strategy?
4. If so, how long should I wait before I take the first step?
5. If not, how else would you go about this and how would you make the best of the equity on the house?
I am a newbie so any advice/tips would be greatly appreciated.
Thanks in advance,
Sirius