New Investor.

[bill]

Hi to all you Forumites.Wonder if i can seek some assistance re first I.P.

Ilive in Adelaide Hills on 10 acres valued @$310k. Owe$185k (to Resi) and am looking @aproperty asking price $150k

I plan to purchase 3or4more properties in the next 4 years (approx.)

Q. How can i set this up for the long term ?

Q . Can i do this with out encumburing my residential property ?

Q. Would line of credit be usefull?

Q.Would i (stop me if youve heard the one about) sign on for the maximum term of 25 years to make the repayements smaller?

Thanx y,all in anticipation. Bill.

 

[bundy1964]

Q. How can i set this up for the long term ?

Buy and hold.

Q . Can i do this with out encumburing my residential property ?

Use line of credit ( LOC ) on your residential ( PPOR ) for your deposits.

Q. Would line of credit be usefull?

Yes most so on your PPOR but it can be used on the IP's as well. Need to use LOC with care though as only investment spending is tax deductable.

Q.Would i (stop me if youve heard the one about) sign on for the maximum term of 25 years to make the repayements smaller?

What you are talking about is principle and interest ( PI ) where most of us use interest only ( IO ) for the smallest payment. 1 property a year will take some capital gain and serviceability, average personruns out of one / both after 2 properties while your income/gains catch up.

bundy

 

[bill]

hi bundy ............ta for the reply re my first i.p.
esp.important re l.o.c. and tax deductability.
cheers bill.

 

[Rolf Latham]

Hiya Bill

Bundy is giving good advice there.

My two bobs worth is as follows.

1. The Resi LOC might be a bit exxy, look to ensure you are getting value for money. With those high level of borrowings most of the major banks will better the LOC rates offered by the mortgage managers usually without early repay penalties. Quite a few LOCs are now in the low 6s to high 5s.

2. Look to use a basic term loan for the 80 or 90 % loan for the in investment property. Current not bad deals are ANZ 5.97 variable I/O for 10 years, Bankwest 3 year fixed at 5.99, and if you are a glutton for punishment but must have the lowest rate Homepath at 5.65 I/O variable for 5 years is also good.

3. If you are short on time seek out the services of a good independent mortgage broker - they will save you time, shoudl save you money, and you benefit from the experience of many other peoples deals.

ta

rolf

 

[bill]

New Investor Bill.

Hi Rolf thanx for your good advice re my post. Resi have suggested as an alternative, to borrow a part of the equity that we have,pay it straight back. It sits in the redraw facility and we use it for deposits for properties when we see what we want. We still have an unencumbered property and we can start with I.P.s
Resi also sent stuff re "WEALTH MAXIMISER", read split loan, which was discussed at great length in this forum.Sounds appealing to blow of the mort: on the P.P.O.R, so im giving that some thought as well.
Good advice re an independant mort:broker Rolf,thanx again ....Bill.