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From: Toyo Spares
Ok, time for a newbie to take the plunge and buy a first IP.
Assuming the following factors -
LVR kept below 80%
DSR kept below 30%
rental return of 7%
bank estimate of rental return approx 5% (is that a reasonable assumption ?)
costs = 10% of purchase cost
equity in current owner occupied property = $120k
PAYG income $80k p.a. with a 48.5% marginal rate
deposit = zero
How do I calculate how much can I afford to borrow for an IP ?
i.e. to work out the weekly repayments I have the PAYG figures but I need the rental figures. The rental figures are a % of the IP value but the IP value can't be calculated until I know the loan amount.
I'm sure a few simultaneous equations would figure this out but, their must be a few rule of thumb/assumptions to make rough estimates.
Any comments.
Toyo
Ok, time for a newbie to take the plunge and buy a first IP.
Assuming the following factors -
LVR kept below 80%
DSR kept below 30%
rental return of 7%
bank estimate of rental return approx 5% (is that a reasonable assumption ?)
costs = 10% of purchase cost
equity in current owner occupied property = $120k
PAYG income $80k p.a. with a 48.5% marginal rate
deposit = zero
How do I calculate how much can I afford to borrow for an IP ?
i.e. to work out the weekly repayments I have the PAYG figures but I need the rental figures. The rental figures are a % of the IP value but the IP value can't be calculated until I know the loan amount.
I'm sure a few simultaneous equations would figure this out but, their must be a few rule of thumb/assumptions to make rough estimates.
Any comments.
Toyo
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