Not sure if i'm ready?

[Bayside]

Howdy people,
I'm keen to start looking into buying my second property.
I owe $195k on a House worth about $280-$300k
It's rented out at $250pw
I pay $60pw board and I have $20k savings.
Currently on $43k a year with a new job that I started 4 weeks ago.
Can see my main problems being, I've only just started new job and i've also only got a 4yr full time contract.
I'd really like to buy a unit in Frankston or Seaford so would need to borrow between $200-$250k.
I'd like to live in the unit or if i can't afford to will rent out and continue boarding where I am.
Anyhoo, just not sure what is the best way to go about things.
What would you do in my position?
I'm not looking to own heaps of places but would like to own about 3 in the next 5-10yrs and be able to afford to live in my P.P.O.R

 

[Welcome]

I would do the following:

Top up loan in IP 1.

If you top up to 90% of $290k = $260k
This will free up $65k equity

Purchase IP 2 @ $280k
Borrow 90% = $252k
Funds to complete ~$40k (10% + 5% costs)

I would the leave the extra $25k from top up in offset account / redraw.

I pay $60pw board and I have $20k savings. I'd like to live in the unit or if i can't afford to will rent out and continue boarding where I am.

Do not use your savings as these are hard earnt after tax $$$, just park them in offset and keep handy as cash buffer. Better to use equity if available as haven't paid tax on.

I would rent out new place cause $60pw is cheap as chips so milk it while you can!!

I'm not looking to own heaps of places but would like to own about 3 in the next 5-10yrs and be able to afford to live in my P.P.O.R

I think if you are prepared to save hard for a few years you should set your goals higher!

 

[Jamie M]

Were you working in the same occupation in your previous employment?

 

[Bayside]

Were you working in the same occupation in your previous employment?

Thanks heaps for the advice!

Yes, i'm currently working for local council.
Previously I was working for a Group Training Company in the same field and they were hiring me out to local council as my host employer.
Council had a job going and I applied and got it.
Horticulture.

 

[Jamie M]

If you've been working in the same field for the last couple of years you might be able to dodge the short employment history bullet.

I haven't run the numbers, but you might experience servicibility issues with your $43k salary if you intend on living in the next place you purchase.

The $60 p.w board is very cheap Like Welcome said, I'd be milking that while growing the portfolio.

In any case, have a chat with a good broker and they'll advise you accordingly.

Cheers,

Jamie

 

[marg4000]

Bayside, visit your financier of choice.

Get all the relevant facts and figures regarding how much you can borrow, repayments etc.

You are then in a position to decide if you can afford another IP at this stage, if not, you will discover what you have to do to be able to do so.
Marg

 

[Bayside]

anymore advice? hehe

 

[Welcome]

What option/s are you leaning towards?

 

[jaycee]

anymore advice? hehe

I'd gather the facts and advice given so far and revisit them after meeting with a broker or lender and seeing what they give you. Like Marg said

 

[Rolf Latham]

Hi Bayside

How mch are you saving per week at the moment ?

ta
rolf

 

[Bayside]

Hi Bayside

How mch are you saving per week at the moment ?

ta
rolf

$400pw but could probably up that every now and again

 

[Ski-bum]

Bayside, I know it's been said before - but have a good chat to a good mortgage broker. He/she will be able to answer a lot of your questions about serviceability, borrowing capacities and implications (if any) on the new employment history.

Just don't overcommit yourself, but it sounds like you're on the right track!

 

[Bayside]

Thanks guys, i've had a good chat with my broker. Thanks for all the advice.

 

[Rolf Latham]

$400pw but could probably up that every now and again

that would suggest u have the cashflow to go again

ta
rolf

 

[Bradsdad]

$60 p/w living in Parky or move to Frankston and miss out on rental income?

I'll leave that to you


You mentioned that you only started new job 4 weeks ago yet I haven't seen any mention of a probationary period. Is there one in the contract?


Regards
Steve

 

[Bayside]

$60 p/w living in Parky or move to Frankston and miss out on rental income?

I'll leave that to you


You mentioned that you only started new job 4 weeks ago yet I haven't seen any mention of a probationary period. Is there one in the contract?


Regards
Steve

Yep that's the problem, got a 4yr contract with Local Gov but contract has a 6mnth probation period.

 

[Bradsdad]

You'll need to wait the 6 months then