Can I buy an IP?

[ricknaz]

Hi everyone,
I currently owe $185000 on my PPOR which is worth around $240000. My wife and I have a combined income of about $75000. I would like to be able to buy another property of about the same value as our current one.

I realise that we will have a high LVR and will have to pay mortgage insurance, I just feel that while we are sitting here waiting to build equity through capital gain we would be building it twice as quickly with two properties. We will look at converting our own home to IO to help with cashflow as well. We live in Logan City and prices around here still seem to be steadily rising so I would rather not just sit and wait because prices will probably rise faster than we can pay down our mortgage.

We do plan on speaking to one of the brokers from this forum but would like some general comments first. I don't want to be wasting their time.

Thanks
Richard

 

[sailor]

Sounds to me like you have a good basis for buying an IP. Good idea to speak with a broker. Have you done any number crunching on a spread sheet or with the PIA software? This would help you.

 

[Qlds007]

I am with Sailor your motives appear to be right and certainly from a financial point of view you appear to be able to service the loan fairly easily.

Structure it correctly and accept that mortgage insurance is often just a cost of investing.

On a separate note what is happening in the Logan area. I had a client buy 2 IP's there last week and had missed out on another 4 being beaten to the contract by other investors.

All bears well for SE Qld.