Over geared? Problems with high LVRs?

Hope that you do know that if you used the FHBG to purchase this property, that you eventually have to move into it for a period of time no later than 12mths from purchase (then move out later). You can't just use the FHBG to purchase IP, and not move in.

Yes i know this and factored this scenario into my calcs. I purchased the property vacant possession (i am already living there) and intend on renting it out after the 6 months is up. I said in my post i can get a good yield based on the rents the previous and neighbouring tenants are paying (pretty reasonable assumption, i think). Having a 6 month vacancy on an IP, recieving $14,000 in grants and avoiding $17,000 in stamp duty is still more beneficial on your total return than if i did nt purchase using the FHBG grant an consequently leased it out from day 1. You don't need a calculator for that, no matter what level of gearing you have.

I think my whole general thinking was that well my deposit is $25,000 based on a 95% LVR. But if i deduct the $14k grant and not pay stamp duty, i'm only really putting in about $11k in equity. But still enjoy the equity position of $25k. It basically means i have less to lose, but more to gain. It certainly an unfair bargaining position that FHB's have against an investor.
 
Yeah, yeah Propertunity!! I'll be looking forward to your predicted property boom.
Buy now, leverage to the teeth everybody. The knowledgeable have spoken.

We'll see guys. We'll see. Bookmark the post, and come back in 12mths (July 2010), and we'll see who is right.

OK investor888, sorry I missed the date by 6 weeks. So let's review how we both went over the last 12 months.

Did people who geared up and brought property over the last 12 months do well?

Hello investor888 ........are you there?.........h e l l o.
 
OK investor888, sorry I missed the date by 6 weeks. So let's review how we both went over the last 12 months.

Did people who geared up and brought property over the last 12 months do well?

Hello investor888 ........are you there?.........h e l l o.

Don't hold your breath Prop. He hasn't logged in for over a year, another fly by night D&G'er - big surprise. Though could be he's here under another name. :rolleyes:
 
OK investor888, sorry I missed the date by 6 weeks. So let's review how we both went over the last 12 months.

Did people who geared up and brought property over the last 12 months do well?

Hello investor888 ........are you there?.........h e l l o.

Had some proper valuations done for refinancing purposes, im happy to share the figures

Property purchased in Jan 2009 for 250k, 4k spent on renovation.

Reval July 2010 280k

10% value increase


Property Purchased Nov 09 for 318.5k, 8k renovation

Reval July 2010 360k

10% val increase

Net yield on these ones are around 4-4.5% (grossing 6%+)

Total return on both investments around 13-15%

Cost of funds prob avg around 6% for that time period. So i've made approx 7-9% and the higher gearing (95%) has obviously been a benefit.

Regards

RH
 
Don't hold your breath Prop. He hasn't logged in for over a year, another fly by night D&G'er - big surprise.
Yeah Steve, I wasn't expecting a response....just keeping a date. I've had my moment........I feel somewhat vindicated by the position I held in the face of that very vocal opposition at the time.

RH - good news indeed - congrats! especially since your results are backed up by a 'proper' val :)
 
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