Hi guys
I'm hoping to be purchasing an investment property (if everything goes well) but I'm having trouble understanding something.
So I'm looking at lenders and finding out how much I could borrow for a potential property, for example. Now it's going to be an investment property, not my place of residence, in fact it's in a whole other city than where I live.
If I'm buying a cashflow neutral investment property, why does my income still matter so much?
Let me put it another way;
Take a potential investment property, 3 bedroom, 600 square metres of land, history has shown it to be leased out 50 weeks of the year on average. So the *tenants* are paying the mortgage (it's cashflow neutral/breakeven). Sure for those "loose" weeks of the year (maybe 5 max), I should be paying the mortgage, sure, ok.
But if an investor wants money for a cashflow neutral property that has a good leasing record, why don't banks jump at this? And another question; I think banks use a percentage in some calculation, someone told me maybe it was a percentage of the income from the property? Can someone explain that one to me? (I don't know what it means so I can't explain it much better...)
It's just I work 3 part time/casual jobs and am just dying to get into the market and I feel so held back by this, even though I'm trying to get other's money working for me, you know, being smart about it? I just have this outdated notion that people who are smart with money should be rewarded But it's seeming like a huge wall right now...
Thanks!
I'm hoping to be purchasing an investment property (if everything goes well) but I'm having trouble understanding something.
So I'm looking at lenders and finding out how much I could borrow for a potential property, for example. Now it's going to be an investment property, not my place of residence, in fact it's in a whole other city than where I live.
If I'm buying a cashflow neutral investment property, why does my income still matter so much?
Let me put it another way;
Take a potential investment property, 3 bedroom, 600 square metres of land, history has shown it to be leased out 50 weeks of the year on average. So the *tenants* are paying the mortgage (it's cashflow neutral/breakeven). Sure for those "loose" weeks of the year (maybe 5 max), I should be paying the mortgage, sure, ok.
But if an investor wants money for a cashflow neutral property that has a good leasing record, why don't banks jump at this? And another question; I think banks use a percentage in some calculation, someone told me maybe it was a percentage of the income from the property? Can someone explain that one to me? (I don't know what it means so I can't explain it much better...)
It's just I work 3 part time/casual jobs and am just dying to get into the market and I feel so held back by this, even though I'm trying to get other's money working for me, you know, being smart about it? I just have this outdated notion that people who are smart with money should be rewarded But it's seeming like a huge wall right now...
Thanks!