New to the game

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From: Lesley .


Hi there. My partner and I are very new to the game of investing. We have had some contact with the Investor's Club and I just want to know if it is possible for us to "go it alone" with our limited knowledge, although I feel a bit more secure with someone helping us, especially with our first property. We earn $92k and have a mortgage of 150K. Our property is valued at approx 220K. Do we find a line of credit loan which still supports the investment property as well as our own property, or do we go for a P&I. Someone's sound advise would be really helpful. Thanks,

 

[gailh]

Reply: 1
From: Gail H


Hey,

The Investor's Club seems to be the flavour of the day (see earlier thread). Yes, you can go it alone. Its not that complicated. Post your questions here, buy a couple of books, and you will soon find that you've got all the basics covered. The learning process never stops, but the most important things can be learned relatively easily.

Establish a LOC against residential home for deposits. Investment property/s should be on stand alone loan (with whichever lender you choose) and not cross-collateralised with your home (ie. only the investment property should be security for the loan).

Loan as much as possible, even if it means paying mortgage insurance (so your money for deposits goes further). Loans on investment properties should be interest only until your home is paid off, because every spare cent should go into that (as its a non tax deductible debt).Only the interest on the IP is deductible anyway, so there is no point paying off the principle on your IPs until home is paid off. Fix interest rates for a few years for insurance against rate rises.

RE areas to invest: read Australian Property Investment Magazine for suggestions of good areas.

Good luck

Gail

 

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Reply: 1.1
From: Lesley .


Thanks Gail. It seems like information overload at the moment. I might have to get unlimited internet access if this carries on!