LVR as % of you portfolio

[Kooz]

37%

Ohh.

Better go shopping!

Karen

 

[Ed Barton]

0%, but I'm an old school investor.
must be 2m at current valuation's/guesses.

 

[Belu]

92% at purchase price - ~72% at current val i would think.

 

[Jamie M]

We're maintaing quite a high LVR at the moment. We don't have kids at present so want to take advantage of our current borrowing capacity to accumulate IPs before starting a family.

Therefore, when equity builds up in one IP, we access it and purchase another. In the mean time, we research areas, working out where the next purchase will be.

With each property purchase, we aim to buy something close to CF neutral, if not positive, that way, if our household income drops (due to kids and part-time work) we will still be able to service our debts. At that point, we'll probably be less active and will let the LVR decline.

 

[nww]

0%, but I'm an old school investor.
must be 2m at current valuation's/guesses.

Not many of us on here, 0%
although I would class myself as young school.

 

[Ed Barton]

Not many of us on here, 0%
although I would class myself as young school.

why are you on zero? retirement phase or an irrational hate of debt?

for me it's a hatred of debt combined with an extremely variable income from one year to the next.

for a few years i only get slightly higher income than average. then for a few years i can buy an ip outright and live the high life.

 

[Rolf Latham]

for a few years i only get slightly higher income than average. then for a few years i can buy an ip outright and live the high life.

one of them gold prospectors

I have a couple of clients with that sort of lumpy income, you are right that the lenders dont like it much

ta
rolf

 

[nww]

why are you on zero? retirement phase or an irrational hate of debt?

for me it's a hatred of debt combined with an extremely variable income from one year to the next.

for a few years i only get slightly higher income than average. then for a few years i can buy an ip outright and live the high life.

Yeah hate the thought of owing someone something, Accountant thinks Im crazy
paying the loans off after a few years.
And income is dramatic some years so easy to pay off sooner.

 

[recruit2]

Selling is looking most tempting as we have a 10yo small car and would like a bigger newer one, and yes, I'd happily sell a house to get a nice car.

Good to hear someone not afraid to make a small sacrifice for some lifestyle pluses without going overboard. I wouldn't sell a house for a car, but I would certainly consider drawing down on equity in special situations such as low cash flow periods. A reliable and safe car is an essential tool for successful Australian life and very difficult to function without it. Then once my cash flow increases again (i.e. building up a business), then I would throw it on a novated lease next time. Nothing wrong with that at all if you buy well and sensibly (1-2 year old), the interest is nothing on 20k and if you aim just to hammer it down quickly, its a handy piece of flexibility to have up your sleeve. A smidgen of the living off equity approach in extreme situations really.

 

[sash]

Based on 84 responses as of 7pm 2 Jan 2011:

11.9% of survey responders have portfolios larger than $5m
8.3% have portfolios between $3-$5m
20.2% have portfolios between $2-$3m
28.6% have portfolios between $1-$2m
27.4% have portfolios less than $1m

The interesting thing is that of these 25% have LVRs less than 35%
and
35% have LVRs greater than 65%....

 

[thamask]

We're maintaing quite a high LVR at the moment. We don't have kids at present so want to take advantage of our current borrowing capacity to accumulate IPs before starting a family.

Therefore, when equity builds up in one IP, we access it and purchase another. In the mean time, we research areas, working out where the next purchase will be.

With each property purchase, we aim to buy something close to CF neutral, if not positive, that way, if our household income drops (due to kids and part-time work) we will still be able to service our debts. At that point, we'll probably be less active and will let the LVR decline.

Exactly in the same situation, I will concentrate on lowering the LVR after i get out of the accumulating stage. A major rule i follow is that the property should be + from day one, unless there is MAJOR future development oppertunity.

 

[jacbmw]

Based on 84 responses as of 7pm 2 Jan 2011:

11.9% of survey responders have portfolios larger than $5m
8.3% have portfolios between $3-$5m
20.2% have portfolios between $2-$3m
28.6% have portfolios between $1-$2m
27.4% have portfolios less than $1m

The interesting thing is that of these 25% have LVRs less than 35%
and
35% have LVRs greater than 65%....

what size is the other 3.6% of the responders portfolios Sash ;-)

 

[tez]

Good to know Im not the only one at around 70-75%!

 

[oh_noes]

Speaking of LVR: what is an acceptable time frame to ask the bank for an appraisal to determine your current LVR? Every 12 months?

 

[MichaelW]

Today LVR of 78% on a portfolio between $1-$2M

This time next year (when build complete) LVR of 64% on a portfolio between $3-$5M

I like development...

If I sell one then LVR of 53% of a portfolio between $2-$3M.

But I'm thinking of holding all four properties in the portfolio that I'll have at completion. I go from tipping in $45K pa of my net income to generating $40K pa passive income once developed (at the 64% LVR). I'm that much underwater today because there's no rent from the development site. Looking forward to the $85K pa cash flow turnaround in a years time!

Cheers,
Michael

 

[kristaje]

We're at 70-75% on 4-5m holding.

Tad high for my liking, so been piling up any extra cash on the offset account...until can be enticed to buy the next one that is!

 

[sash]

Are you CF+......or do you have a large income?

How do you find servicing a loan of $3-4m.....I have a similar portfolio but have loans 1/3 the size.

Would I be incorrect in saying that most people on this site have an equity position of less than $1.5m?? This is very interesting....because I think I am way too conservative...maybe I need to ramp up a lot more.

Keep the posts coming....learning heaps at the moment from a structuring of debt to equity positions. It has already got me thinking in terms of possibilites.

We're at 70-75% on 4-5m holding.

Tad high for my liking, so been piling up any extra cash on the offset account...until can be enticed to buy the next one that is!

 

[Ridin-High]

Are you CF+......or do you have a large income?

How do you find servicing a loan of $3-4m.....I have a similar portfolio but have loans 1/3 the size.

Would I be incorrect in saying that most people on this site have an equity position of less than $1.5m?? This is very interesting....because I think I am way too conservative...maybe I need to ramp up a lot more.

Keep the posts coming....learning heaps at the moment from a structuring of debt to equity positions. It has already got me thinking in terms of possibilites.

man if i was in that position like you. Eg 2m equity, no way i'd still be buying resi property. You already have enuff equity cows, its time to get some Cash flow cows and by that i mean quality commercial property

 

[sash]

I know....but this rapid growth in equity has only come in the last 5 years!

5 years ago I was an amateur with 5-6 properties.....

Commercial Property does worry me....you need to have $5m to buy anything decent....

man if i was in that position like you. Eg 2m equity, no way i'd still be buying resi property. You already have enuff equity cows, its time to get some Cash flow cows and by that i mean quality commercial property

 

[gooram]

I'm at about 70% on 2-3M, still in the accumlation phase I guess, semi-comfortable with current debt levels, looking to subdivide and sell off a block to reduce it a little.

Treading water for now, when we get some more growth, and better yields, we'll up the ante... a few years away before that happens I reckon.

Good thread, interesting to see where others are in the current market.