How to finance the repayments??

[chook77]

Hi, I will explain the situation and your wise advice would be much appreciated!!

My husband and I have two investment properties
One in townsville, worth aprox. 430000, owe 234 000
One in Brisbane worth 330000, owe 170 000

We have 80000 in cash that we would like to invest in another property, however I am at home with 3 small children, and won't be earning an income for another 4 years. And on my husband's wage we could not afford the repayments on another loan.

Can we buy another property and service the loan some other way??? Are there ways around this??? We don't want to have to wait 4 yrs to buy another property.

Thanks

 

[The Y-man]

Hard to say without further info - eg Hubby's wage, your rental incomes etc....

The Y-man

 

[Rolf Latham]

If you need to capitalise the interest, rather than choose to, then this may not be the right time to go an borrow more dollars for another asset,

Unless you know for sure that the asset will appreciate at X or that you are sure that you will get back into your own income, I would ensure I do a careful analysis of the cashflow.

Structuring is very important here, and for a start I would NOT use my cash.

Id use the cash to repay any home loan, and then re borrow the deposit out of the increased equity from the PPOR. If you dont have a home loan then thats obviously not applicable, but still, correct structuring can make a great deal of difference to the long term bottom line and middle line risks

ta
rolf

 

[Dazz]

Can we buy another property and service the loan some other way??? Are there ways around this??? We don't want to have to wait 4 yrs to buy another property.

G'day chooka,


Too right. Wait 4 years - yeah right....pffft. As with most things in life, it simply comes down to priorities.....and how badly you want somefink.


Being a modern day woman myself, I've found kickin' the lazy bum of a hubby up the backside and ordering him out of the house to go find a proper job does the trick nicely. Smarten up, go get a real job or nick off.


The other thing I did to get ahead was to dump the kids and go back to work. Banks will love it, you'll get your loan approved, and she's all be happy days. Most people always go on and on about the kids, but I found dumping them off to anyone who'll have 'em really gets you ahead.


I'm sure there are plenty more "out of the box" ideas. There's my two.

 

[JamesGG]

I'm sure there are plenty more "out of the box" ideas.

Wow. And there I was, about to simply suggest that they buy something positively geared instead.

"Modern day woman". Love your work.

 

[rugrat]

buy something positively geared instead.

Yeah that. Just make sure whatever you buy covers itself.

 

[StuartW]

If you need to capitalise the interest, rather than choose to, then this may not be the right time to go an borrow more dollars for another asset.

Rolf, I couldn't agree more.

 

[josko]

If you need to capitalise the interest, rather than choose to, then this may not be the right time to go an borrow more dollars for another asset,

Unless you know for sure that the asset will appreciate at X or that you are sure that you will get back into your own income, I would ensure I do a careful analysis of the cashflow.

Structuring is very important here, and for a start I would NOT use my cash.
Id use the cash to repay any home loan, and then re borrow the deposit out of the increased equity from the PPOR. If you dont have a home loan then thats obviously not applicable, but still, correct structuring can make a great deal of difference to the long term bottom line and middle line risks

ta
rolf

Great advice and I would emphasise that part also.

You seem to have enough to purchase another IP through the equity in your existing properties, but as mentioned above by Y-Man, it is hard to give you a direct answer without knowing all the details.

Is 80k enough to cover you for 4 years if you have a NG shortfall? You need to work this out.

Capitalising the interest also depends on your Risk Profile and how comfortable you are with this. There are SS'rs here that use this strategy.

As Rolf says, structure is EXTREMELY important. If you read through some of the recent posts on this forum you will realise that banks have their own agendas and you need to make sure your structure is No.1, not the banker's sales targets.

Regards JO

 

[Token Funder]

Hi, I will explain the situation and your wise advice would be much appreciated!!

My husband and I have two investment properties
One in townsville, worth aprox. 430000, owe 234 000
One in Brisbane worth 330000, owe 170 000

We have 80000 in cash that we would like to invest in another property, however I am at home with 3 small children, and won't be earning an income for another 4 years. And on my husband's wage we could not afford the repayments on another loan.
Can we buy another property and service the loan some other way??? Are there ways around this??? We don't want to have to wait 4 yrs to buy another property.

Thanks

You answered your own question.

 

[chook77]

what to do with the 80K??

Thanks Everyone,

I think from the advice it would be safer to wait till I'm closer to going back to work, or find a positive geared place,.....or, if I take "modern woman's" advice, kick my hubby up the bum and get rid of the kids.

Thanks for the advice about not using the cash for a deposit. What would we do with the cash to help our investment???? Put it on one of the other loans. We are renting and probably will for another few years.

Thanks

 

[Rolf Latham]

Hiya Chook

if any of your loans have the capacity for a 100 % offset account, then for the moment that may be a good place to park the dough, though if you are without an income, a term deposit of some sort may work well for you too because u might not pay much tax ?

ta
rolf