How many properties will banks lend for if they cf +ive
- Thread starter THEHEATH
- Start date
TheHeath
Good question.
In theory yes. In practice (well mine anyway) I would say no.
Assume you are talking resi you will gradually use up your LMI options and your LVR will begin to go down. For example you will go to Bank A and they use insurer Z and they will give you loans until you have 1 mil of loans and then they will say "Sorry, you are now maxed out with us", You will do the same at Bank B who uses insuer XY, when you max out there you go to Bank C only to discover that they use insurer A and you are already maxed out with them. Go to Bank D and they use XY insurer so no luck there either. Bank G fortunately self insurers so you get more money from them.
So you will find LVRs go from 90% to 80% and then down to maybe 60% purely because in the end you are a risk purely because of the size of your personal borrowings.
We barely use tax deductions as most are in a trust and until recently very positive. We are not high income earners.
Good question.
In theory yes. In practice (well mine anyway) I would say no.
Assume you are talking resi you will gradually use up your LMI options and your LVR will begin to go down. For example you will go to Bank A and they use insurer Z and they will give you loans until you have 1 mil of loans and then they will say "Sorry, you are now maxed out with us", You will do the same at Bank B who uses insuer XY, when you max out there you go to Bank C only to discover that they use insurer A and you are already maxed out with them. Go to Bank D and they use XY insurer so no luck there either. Bank G fortunately self insurers so you get more money from them.
So you will find LVRs go from 90% to 80% and then down to maybe 60% purely because in the end you are a risk purely because of the size of your personal borrowings.
We barely use tax deductions as most are in a trust and until recently very positive. We are not high income earners.
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Answer: Yes.
GoAnna gives a very good answer, but I find a lack of imagination is the main stumbling block to progress. (Not GoAnna's!!)
When people first start out, they simply can't imagine owning 20 properties, so they don't zen themselves into that future place, they stay rooted in the present.
Not an insurmountable problem, but can be very costly. Investors think like home buyers, and build fences around their imagination. It can take a few deals and a few unnecessary dollars (read: thousands) before an investor starts to think like an investor.
Once in the mindset, then mortgage insurers and other such external restrictions tend to disappear almost overnight. The investor is single minded, and will buy and buy and buy again. So yes, once you get the hang of it you can keep buying until you don't want to buy anymore.
Not all at once, mind, but over time anything is achievable.
In fact, some of the residential mortgage lenders now have an 'investor' category of applicant for people who earn investment income greater than their PAYG or business income, and the old 'rent reliant' excuse to no further lending is not heard of much nowadays
Enjoy the journey, the hunt is half the fun
The other half is owning property - that really is fun!
Cheers
Kristine
Alex I would argue against such an investment being defined as positive. If you lose your job and the property costs you money each week it's negative. It's easy to lose sight of the fact that negative gearing actually means receiving a % of the loss back when you have a job. With no job its way clearer!
Well sort of. The LVRs do not start at the same level...and then there are margin calls which are a lower risk with property.
And most Margin Loans have no requirement for proof of income, you just need to hold the security, because in a perfect world, share prices don't go backwards!
Much harder to get the leverage though, hence why I started with property and will then move into Shares/MF's, using Property equity.
.....no need to be vague and wishy washy about this....the answer is 27.
I thought it was 72 but I may be numlexic
Hiya
YES
But the lenders idea of cashflow positive and yours may be miles apart
On average, at current assessment rates and risk margins most lender calcs run at around 13 to 18 % to be cf neutral.
Now that some serious cf+
Sometimes u still get the " rental reliant"................what ??
You mean my client has 48 Separate, and diversified rental icnomestreams and ONE PAYG income JOB.................
Id say they are JOB reliant
ta
rolf
YES
But the lenders idea of cashflow positive and yours may be miles apart
On average, at current assessment rates and risk margins most lender calcs run at around 13 to 18 % to be cf neutral.
Now that some serious cf+
Sometimes u still get the " rental reliant"................what ??
You mean my client has 48 Separate, and diversified rental icnomestreams and ONE PAYG income JOB.................
Id say they are JOB reliant
ta
rolf
