Newbie Seeks Advice - Buying First IP

[Fire_Storm4670]

Hi

I am 30 years of age and have just moved into my new PPR three weeks ago. House was a new construction.

My details are as follows:

- Mortgage is $318K.
- House is valued at approx $410-420K.
- My gross income is $125K per year.
- Cash at Bank is $15K. (Spent the rest on house, fees, etc)
- No other investments or savings.
- Live and work in Brisbane QLD.
- No dependants.
- Personal credit card debt is nil.

Am I able to start thinking of acquiring investment properties at this point in time? Or do I need to make some inroads into my own mortgage a bit more? Will banks even look at me when it comes to IPs? Would I be left out of pocket way too much?

Thanks!

Richard

 

[jasperjue]

With your income, equity and debt levels you should have heaps with which to invest in IP's........ or Harley Davidsons.

 

[alexlee]

The thing that really stands out is the lack of savings. At an income of $125k, you should be able to save at least a good $30, $40k a year.
Alex

 

[Fire_Storm4670]

Thanks. I know savings are low.

Most of my funds were used in clearing a HECs debt, car loan, and getting myself into my home. I normally have little trouble saving. It just doesn't look very good at the moment. My bad.

Also, I have only been on this salary since early 2007.

 

[alexlee]

Am I able to start thinking of acquiring investment properties at this point in time? Or do I need to make some inroads into my own mortgage a bit more? Will banks even look at me when it comes to IPs? Would I be left out of pocket way too much?

Thanks!

Richard

I'm not a mortgage broker (you should go see one) but on a $125k salary with that sort of debt you can certainly borrow more.

As to whether you'll be left out of pocket too much. What's 'too much' to you?

Personally, if I were you I would wait 6-12 months and get some savings together. Without savings you're much more vulnerable to interest rate rises and unexpected expenses.
Alex

 

[Booboo]

Dont wait... just doit...

Looking at those figures, your in a very healthy state to buy investment Property... As to how much you have saved... heck I'm several years older and I've never had any where near that in the bank... well done.
As to waiting a while... I dont see that as helping at all... yes you may save a few thousand (he says trying not to choke with envy) but realisticly the cost of houses etc will increase a lot faster than you can save, and saving generaly entails personal sacrifices... (not saying saving is bad in any way, its great, but...). If you bought some IP's in the right area (and used a line of credit to cover the short fall between rent and mortgage you wouldnt be out of pocket and would be miles ahead... please note that this is only my view as it may not suit you methods...) you would be able to gain a lot more equity in a lot shorter time than trying to save to do it...
I have a personal issue with being told to "wait a while and save" as when the wife and I where 19 and just married we had a block of land which we owned out right and approached a bank for a loan to build our first house (both working full jobs at the time) and the very helpfull bank manager simply told us to go away, continue paying (dead money ) in rent and save for a few more years first... we then proceeded to the next bank and we built our first house a month later.. I still want to ring that bank managers neck for his useless advise at a time we really needed it..