Low income means can't buy IPs?

$200k would buy an apartment in many Adelaide suburbs, perhaps just rethinking where you intend to buy might open up the options.
The Y-man said:
1. 65k is not LOW.
Click to expand...
I would call it low if represents combined income (how it reads, "our pay").

Especially with $300k PPOR debt already.
 
hobo-jo said:
$200k would buy an apartment in many Adelaide suburbs, perhaps just rethinking where you intend to buy might open up the options.

I would call it low if represents combined income (how it reads, "our pay").

Especially with $300k PPOR debt already.
Click to expand...

Sorry, l should have been more specific, l am a stay at home mom and we have 1 child, only my husband is working. Does that change our borrowing capacity?
 
BigS said:
Sorry, l should have been more specific, l am a stay at home mom and we have 1 child, only my husband is working. Does that change our borrowing capacity?
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I think it does. By going to work, you can increase your serviceability and borrow easily. You don't have to go back to job permanently, a six month at job will enable you to borrow easily.

Educate yourself, get ready, get a job and go buying for some time. Once you have a sizable portfolio and buffer, you can stop working if you want it that way.

Positive cash flow properties will do the trick.
 
Hi BigS,
I'm similar situation with you, except I'm male and lower income :)
We have a baby and wife personal decision to not back to work soon.
So left me with thinking task

We have 4 Ips and will be settle another one next month. Serviceability is one of the hurdle, but contact savvy broker to discuss is must.

As mentioned, positive cashflow is one good strategy. One thing for sure, think what do you want to achieve, your dream, goals. Then move backward map the strategy.

Property is one of the tools, doesnt mean other can't do the trick. We combining property and managefunds. Property for leverage, managefunds for buffer reserve.
 
Here's what I'd do.

1. Consider getting rid of the lease. That will bump nett income up considerably.
2. If you have a PPOR loan that's set up as P&I - consider switching to IO
3. For the IP purchase - use a lender that takes your PPOR repayments at "actual" and not "inflated" - in this instance, the IO repayments on your PPOR will improve your borrowing capacity by quite a bit
4. If you have credit cards - reduce the limits (if possible)

Cheers

Jamie
 
60k is not low income....

Just to show you whats possible;

-$44,000 self employed income + $9,500 a year for centerlink benefits
- Married ( only husband working)
- 2 kids.
- PPor paid off.

-> this client is now settling on his 3rd IP ( 1st one bought in Western sydney $285,000/ 2nd also in W/s for $315,000 and 3rd one settling on a House central coast $345,000)
 
I have seen lots of clients that can't do much due to mindset.

Poverty of mind is much harder to overcome than low income.

The fact you are asking the q suggests u are well on the way.

Within reason, it's not what you earn, it's how you harness it

Ta

Rolf
 
Rolf Latham said:
I have seen lots of clients that can't do much due to mindset.

Poverty of mind is much harder to overcome than low income.
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Exactly. One of the things that I definitely agreed with in Rich Dad, Poor Dad was that it was about the mindset. You can be a rich person without money.
 
Low income means I can buy IPs

Mindset is critical for property investment. Ask yourself "what can I do with what I have?" Start from there and make it happen. Simply a decision followed by action. Very achievable on a low income.
 
Mick C said:
60k is not low income....

Just to show you whats possible;

-$44,000 self employed income + $9,500 a year for centerlink benefits
- Married ( only husband working)
- 2 kids.
- PPor paid off.

-> this client is now settling on his 3rd IP ( 1st one bought in Western sydney $285,000/ 2nd also in W/s for $315,000 and 3rd one settling on a House central coast $345,000)
Click to expand...

Mick, your example shows a family with their PPOR paid off. That is an entirely different scenario to a young couple starting out with a PPOR debt.

In our case, BigS, we could not do anything financially until the PPOR built up considerable equity. It was not financially viable to me to work with young children. When the kids went to school I spent my daytime educating myself, on both mindset and in order to learn everything I could about investing. We now own 4 houses (so does the bank) but it wasn't until later in life. You only need to own some properties through one cycle to get massive capital growth which can lead to greater wealth.

PS Investigate South Australia and Tasmania

Best wishes
 
BigS said:
Hi all, we are very newbies and have never bought any IPs before. Recently, we have spoken to some property companies. It's those that you have to pay membership fees and they will recommend properties for you, l think they tend to recommend new builds. Long story short, we were told by that few companies that our income is low and can only borrow very little, like 200k only, so they are not interested to proceed further. We are feeling very dejected now.
We have 70k deposit, part cash part equity. Is there really no way that we can proceed with buying IP? It's really all about income? Will speaking to a mortgage broker help? Thanks.
Click to expand...
This site is all you need.

Your income level will determine which type of property you can buy - and where - but it won't stop you from getting on the ladder.

A lot of folks on this site talk of $500k here, and $800k there, etc - they are professionals on a lot of money.

Ignore that.

$70k is enough to start. You could probably borrow $300k approx with that deposit. An MB will help you there.

The next step is to start selecting areas which you can afford, and narrow them down to best prospects for future growth and/or cashflow.

Talk to one of the very good MB's on this site and get your team together as well.
 
Hi All,
I was told the same though by my bank.Despite i earn more.
I need a mortgage broker too. Can i get advised by someone here.
maybe a number or website link
 
Regarding the novated lease, how badly can this affect your serviceability?
If any of the brokers care to run some quick numbers, say you were on 85k with a 20k novated lease over 3 years?
How much very roughly would this lease reduce your borrowing capacity by?

Also is a novated lease more favorable to a lender than a normal car loan? I would have assumed so due to the pre tax contributions and GST paybacks.
 
I just wanted to add that I think I was on $58k a year (only four years ago, so it wasn't a lot of money then either) when I bought my first IP.
 
Hi,
It is all about mindset and having a good broker,at the height of my investing about 6 months ago had only 1 wage earner $48k per annum and settled on 5th IP our debt was 1.2m and values of all property 2.1m with 80k gross rental return,so it can be done.
Macca446
 
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