Investment Loans 95%

[Taku]

In hindsight i regret it because you can only top up to 90% anyway, so despite my properties going up in value, there was minimal to extract out.

Hey D.T. (or anyone else that may be able to help answer),

Could you please clarify what you mean by the above?

I'm planning to purchase another IP, ideally 2, by the end of this year. I don't have a PPOR and have 1 IP with a 20% deposit which I purchased in October last year.
The plan is to get a reval in July to see if there has been any growth and draw some of the equity out.
Because there hasn't been much time for growth since I purchased my property, I'm essentially going to have to extract some of the 20% deposit I initially put down on the property (currently at 80% LVR but looking to go more aggressive to around 88-90%).
My plan for the next couple of purchases is to get 95-97% lend.
I am planning to go with Westpac for next loan at 97%, because my current loan is with Westpac already.

I was interested in what you stated because I will be in a similar boat to you when you had started.

How will I be affected?


Cheers,

Taku

 

[Rixter]

I don't think that's the problem.

The problem is Aussies only know one thing about making money, and that's property investment. Entrepreneurship is in a coma in this country.

How many people or what percentage of the Australian population outside of ppor ownership do you think property invest?

 

[unloadmymind]

I don't know the exact proportion, but judging by the huge IP books of the banks so many aussies know nothing better than invest in property. It's an arguably unproductive investment, and an unimaginative money making scheme.

Few have the ability and creativity to be entrepreneurs that create jobs other than real estate agents and brokers.

 

[windyzz]

Hey D.T. (or anyone else that may be able to help answer),

Could you please clarify what you mean by the above?

I'm planning to purchase another IP, ideally 2, by the end of this year. I don't have a PPOR and have 1 IP with a 20% deposit which I purchased in October last year.
The plan is to get a reval in July to see if there has been any growth and draw some of the equity out.
Because there hasn't been much time for growth since I purchased my property, I'm essentially going to have to extract some of the 20% deposit I initially put down on the property (currently at 80% LVR but looking to go more aggressive to around 88-90%).
My plan for the next couple of purchases is to get 95-97% lend.
I am planning to go with Westpac for next loan at 97%, because my current loan is with Westpac already.

I was interested in what you stated because I will be in a similar boat to you when you had started.

How will I be affected?


Cheers,

Taku

I think you'll find lots of issue finding lender that'll be lending higher than 90% LVR these days, since new Policies introduced by the big banks
I suggest saving up bit more until you have enough for 20% deposit and Stamp duty

 

[Rolf Latham]

I don't think that's the problem.

The problem is Aussies only know one thing about making money, and that's property investment. Entrepreneurship is in a coma in this country.

I feel thats for the following reasons

1. Societal.

Tall poppy syndrome, My US Euro and Asian friends cant relate to the concept of knocking success and bringing my fellow crabs back into the bucket.

2. Gov.

We still have a taxation system that discourages people to be financially successful. Although there have been some useful advances, on a global basis, our taxation regime for the little high performance PAYG or SE risk taker that makes a BIG go of is not progressive, its punitive. So the rtn for risk ratio isnt there.

There is bugger all real gov incentive to take a punt, but plenty to take to the lounge..........


3. Cultural

Risk Averse....................... and a little backward. That Naivety saved much of Australia from the same pain just post GFC that many other more "financially savvy" countries.

That same risk avoidance is why its near impossible to raise venture cap funds out of oz

ta

rolf

 

[Taku]

I think you'll find lots of issue finding lender that'll be lending higher than 90% LVR these days, since new Policies introduced by the big banks
I suggest saving up bit more until you have enough for 20% deposit and Stamp duty

Hey Windyzz,

Thanks for your feedback.

I do have a bit of cash saved up; however, my plan was to hold onto as much cash as possible. Even if that means I have to pay LMI.
My idea was to go as aggressive as possible whilst I have minimal commitments (i.e. no dependants, partner etc.)

Like you suggest, I may have to reassess now though considering new restrictions are being introduced.


Cheers,

Taku

 

[datto]

Rixter, i think there are about 1.7 million property investors in Australia.

Our taxation system is a killer. We got rid of provisional tax only to get PAYG instalments....lol, it's like saying would you like french fries or chips? Then we get rid of SalesTax and PPS only to get fish slapped with GST.

Then there's fuel tax, tobacco tax, land tax, stamp duty, payroll tax and other duties. Lets not mention capital gains tax. Imagine how much richer we could be if we didn't have to pay all these taxes. There has got to be a better way. Datto think tax bad, very bad.

 

[mja]

In the next week or so I plan to go back to ANZ for purchase of my next investment property and get approval for 95% (+/- LMI). I'll update this thread in due course.

 

[datto]

Good luck with that mja.

 

[Sonamic]

I don't know the exact proportion, but judging by the huge IP books of the banks so many aussies know nothing better than invest in property. It's an arguably unproductive investment, and an unimaginative money making scheme.

Few have the ability and creativity to be entrepreneurs that create jobs other than real estate agents and brokers.

Why waste your time reading this Forum then?

Self made wealth is self made wealth. What does it matter how unimaginative the generation technique is? I find "scheme" such a dirty word. The end result, my money is still the same colour as any entrepreneur.

 

[hugh72]

The implications of going bankrupt in this country are a major disincentive for risk taking/ entrepreneurial endeavors here compared to the US.

 

[unloadmymind]

Why waste your time reading this Forum then

To avoid mistakes LoL

 

[Ausprop]

Self made wealth is self made wealth. What does it matter how unimaginative the generation technique is? I find "scheme" such a dirty word. The end result, my money is still the same colour as any entrepreneur.

true however when it is distorting the economy and crippling productivity do not be surprised if changes are made. Not saying it will happen, however with resources fading and the worsening fiscal situation, car manufacturing gutted etc, when living standards fall and unemployment rises people may start to question why and what needs to be done

 

[BayView]

I don't know the exact proportion, but judging by the huge IP books of the banks so many aussies know nothing better than invest in property. It's an arguably unproductive investment, and an unimaginative money making scheme.

Few have the ability and creativity to be entrepreneurs that create jobs other than real estate agents and brokers.

I don't believe this is the case.

I see plenty of folks around that are in business, starting one etc.

I see lots of tradies on a daily basis that are self-employed; these are surely a type of "entrepeneur".

The transition from someone starting a business to being one that creates more jobs is not that simple in Aus, and getting harder and harder every year..

Manufacturing is dying off as a possible form of entrepreneurship as well.

The cost of employment for most who are starting a business - or running a small one - is definitely a handbrake.

Many folk opt to stay in the safety of a PAYE job, and then invest in either shares or property - or superannuation.

What else is there to invest in which will provide a decent prospect of yield and cap growth over the shorter and longer term?

 

[unloadmymind]

I don't think there's enough entrepreneurs going around, these tradies are just like any payg people because they see it as a job not as a business. They trained for it like the lawyers and accountants who trained and studied for their jobs.

And I would not call investment in property to be risk averse, what with the negative cash flows among many investors with the presumption that sometime in the future these properties will make handsome gains that's more than the losses incurred during the time held.

I would think as well the mineral wealth of this nation has made us complacent, hoping we don't need to be innovative when all we have to do is dig stuff from the ground and sell these raw materials. now we're come to the rude awakening of a Mining Bust and we're left scrambling for growth in other sectors, and surprise surprise the only one doing well is property sector that has to be muzzled by APRA. What other tricks can we pull out of the hat?

 

[Rixter]

I don't think that's the problem.

The problem is Aussies only know one thing about making money, and that's property investment. Entrepreneurship is in a coma in this country.

Rixter, i think there are about 1.7 million property investors in Australia.

So, using those figures, equates to 7% of the population.

Thats doesnt seem much.

 

[BayView]

I would think as well the mineral wealth of this nation has made us complacent, hoping we don't need to be innovative when all we have to do is dig stuff from the ground and sell these raw materials.

If you're talking about the average Joe in the street; I don't think the mining situation enters people's minds on a daily/yearly basis - unless they are directly involved in the industry?

 

[unloadmymind]

If you're talking about the average Joe in the street; I don't think the mining situation enters people's minds on a daily/yearly basis - unless they are directly involved in the industry?

The Howard/Rudd years would not have been able to hand out all these tax cuts, baby bonuses and family tax benefits without the mining boom. Collectively it has made us complacent with the thought we are a lucky country without much effort.

It also gave us an inflated currency that allowed us to buy cheap imports sonwe let out industries die during the temporary period of boom which we thought was permanent.

 

[Investig8]

It would be nice if this thread got back on track to "Investment Loans 95%" or at least in alignment with high LVRs and the banks current status, anyones actual experience with this in the current climate, that might more useful for the OP and anyone else coming to read it.

I don't mind reading about different viewpoints on the economy, especially since, I'm an entrepreneur, as stated by the Oxford dictionary (A person who sets up a business or businesses, taking on financial risks in the hope of profit) I enjoy the discussions, love everyone ripping in with whatever skillset they have, be it, intellectual research or in the trench on a daily basis.

If that's the case lets start a thread
"State of the Economy - Next 5 years"
"Entrepreneurs Stand Up and Be Counted"
"My Green Has the Same Weight as Your Green"
or WTF Who Stole My Cheese? (totally random for those that get it)

Just my 2 cents, Have a great day!

 

[Sonamic]

Agreed Investig8.

Perhaps from here on in "aggressive accumulators" may have to go to 90% LVR to satisfy the banks?