26 Year old looking for advice

Are amp still doing that?

To my knowledge, yes (and St George). I haven't tested this in a while and would run this scenario via my lender contacts before submitting.

In terms of cons, Jess has outlined it pretty well.

I'm not sure about the comment around whether you can grow a very large portfolio. I guess it depends on your definition of very large - but the strategy of joint purchases can also assist in building larger portfolios as joint ownership often opens up opportunities to reap significant rewards that would otherwise not be possible.

As with any investing strategy, you've got to have the right frameworks in place and strategy, but no reason why you can amass serious wealth by doing this.

From a finance angle, you can borrow and grow a sizeable portfolio. It would depend on normal servicing policies and then taking advantage of lender niches. St George are pretty conservative, so you may struggle with them. AMP on the other hand have a very generous serviceability calculator, can go pretty far with them usually.

As you grow your portfolio to extreme limits and start relying on the 'last few lenders' (Macquarie/others that service on actual repayments and no rent reliance policies), you may need to address the joint purchases. Nonetheless, you should definitely be able to grow a larger portfolio without this holding you back for a while (250k income!) - just need to choose the right lenders and have a tailored plan.

You might be able to get the NRAS incentive working for your borrowing power too with FirstMac (you'll need another security with them too though). Having 11k after tax added to your income is a very powerful addition to your borrowing power. They also take debts at actual repayments, so utilising them as part of your lending plan may extend your journey.

Cheers,
Redom
 
Yes, but sadly the $240k income is only going for the next 6 months - he needs to be able to service after that period too, and any planning needs to take that into consideration.

There's also that pesky 'Do you know of any income changes yada yada' question to take into account....

If it was indefinite it would be a different story :)

I would recommend doing a budget based on your 'normal' living expenses once you're back in the real world, to see how much disposable income you'll have and use those numbers to determine how many IP's/PPOR you can afford based on the projected rental income etc. It's not so much what you can borrow now, but how much you can afford to repay later that needs to be taken into consideration.

Trust me, coming back from high income/low living costs can be (is) a rude shock :)
 
Thanks for the advice everyone, I do appreciate it.

If I were to sell out of the two existing properties is there a way of signing over the properties without my brother & parents having to pay CGT or stamp duty?
 
Hey Jess good point, I do have a secure job back in Brisbane available to me "depending on downturn in the construction industry' which will see me earning 80/90k to be conservative, 110k is possible if the overtime is available.

At the moment im still living at home ( on my week off on RNR ), yes its bad I know!
With living at home my expenses p/w are $550, this is servicing loans, fuel, food & entertainment. On my wage back in Brisbane it should leave me with a surplus of roughly $650p/w. If I were to move out id either

- Buy a dual living place in the hope to have a room/rooms to rent out.. Somewhere in the 300-350K range ( If possible )

or

- Rent a room

I guess Option A would be my ideal scenario atm.
 
Yes, but sadly the $240k income is only going for the next 6 months - he needs to be able to service after that period too, and any planning needs to take that into consideration.

There's also that pesky 'Do you know of any income changes yada yada' question to take into account....

If it was indefinite it would be a different story :)

I would recommend doing a budget based on your 'normal' living expenses once you're back in the real world, to see how much disposable income you'll have and use those numbers to determine how many IP's/PPOR you can afford based on the projected rental income etc. It's not so much what you can borrow now, but how much you can afford to repay later that needs to be taken into consideration.

Trust me, coming back from high income/low living costs can be (is) a rude shock :)

With todays servicing calculators, no reason why you cant go further without needing to divest. 90k income is plenty to work with and may easily be stretched to a multi-million dollar portfolio.

Broker should cater to your situation - divesting may be part of the equation, but on first glance, you may be able to leverage further without needing to sell. At 4 IPs (and sub million dollar debt), at todays rates, and even with your big income fall, that discussion may be a while away.

Probably best to map it out before making investing decisions. You MAY even be able to go to lenders that dont apportion still (havent checked, but worth exploring as part of a plan).

Also may be best to ask your CGT qn in the tax section OP. I think it would be a CGT event.

Cheers,
Redom
 
Thanks for the advice everyone, I do appreciate it.

If I were to sell out of the two existing properties is there a way of signing over the properties without my brother & parents having to pay CGT or stamp duty?

Whoever sells will have to pay cgt. Whoever buys the whole or a share of the ownership will have to pay stamp duty on that share.

I can't see how it can be avoided. My family had to pay those things, so I'd imagine the rules would be the same for your family too :)
 
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