Ok, heres where I am at. Currently in the position to buy 2nd IP or a real dog box PPOR.
I will go into detail of my first IP.
Current value, approx 380K (if not more)
Rent as of mid Jan to rise to $400 P/W
Current loan approx 261K
Approx LVR 68%
Will be refinancing with a different lender and 30k will be taken to pay out a ex. This 30K is tax deductible as I have already cleared this matter with the ATO.
So after the payout and the break costs all up approx 32K new LVR sitting at about 77%
So if I just sit on the one IP with the current loan of 293K with Westpac’s 4.99% IO 3yr fixed rate, this property will be cash flow pos
Interest @ 4.99% $14620
Rates $1200
Insurance $900
Water $724
PM Fees $1700
Total Expense $19144
Total Income $20800
Left Over Cash $1656 Approx
Yes this is a good situation to be in, however will not achieve what I want by just sitting on the one property.
Buy 2nd IP in the Darwin market; this would likely be a higher end unit. Let’s say it will cost 330K,
Not to sure what loan I will be using as of yet… however it will be fixed.
Purchase Cost 330K
Stamp Duty $12,286
Other costs $2000
Deposit drawn from IP 1 $35,000
Total Cost $309,286
LVR 93%
Not including LMI as I am not to sure what this would cost, so possible LVR at about 95%
Rental yields are approx 5.6% for the properties I am look at.
So lets say by the time I get this property I can get a 5 yr fixed IO loan for 309,286 at about 6%
IP 1
Will take $40,000 out, use $35,000 as deposit and have a $5,000 buffer
So total loan on IP 1 will now be 333K
Interest + expenses $21140
Rental Income $20800
= neg $340 P/A
IP 2
Interest @ 6% $18557
Rates $1200
Body Corp $1900
PM Fees $1800
Insurance $800
Total Expense $24257
Total Rental Income $18720
= neg 5537 P/A
Total Expense $45397 (not including any tax benefits into these figures)
Total Income $39520
= neg $5877 P/A
$226 P/F
Total Loans $642,286
Total Value $713,000
Total LVR 90%
I buy a bog box unit in Townsville for 180K, with the intention that it will become an IP once I get posted. Also I will attempt to improve the unit depending on funds and time left in location.
Once again I will use a $35,000 deposit and keep $5,000 as a buffer.
Being a defence member with more that 5yrs service I can utilise the Defence Home Ownership Assistance Scheme (DHOAS) http://www.defcredit.com.au/DHOASAdvantageHomeLoans
Purchase Price $180,000
Stamp Duty $2000
Legal Fees $2000
Total Purchase $184,000
Deposit $35,000
Loan $149,000
Total loans $482000
Loan repayment $1001 P/M
Minus DHOAS $220 P/M approx
= $781 P/M
On going costs would include rates and body corp. approx $3200 which is about $ $250 P/M
Total out goings for PPOR would be approx $1031 P/M, which would involve me downsizing from a DHA 3 bedroom house only costing me $600 per month into a small two bed room unit with no or very small yard. Keep in mind I have my daughter on weekends.
So for the same price as holding two quality IP’s, give or take a few dollars I could have a PPOR and 1 IP total value of 560K or 2 IP’s and I continue with cheap rent and big house with a total value of 710K… I am more inclined with the 2 IP option however if there is anyone that has some other ideas that I could take into account please share…..
Cheers,
Sorry for the long post
I will go into detail of my first IP.
Current value, approx 380K (if not more)
Rent as of mid Jan to rise to $400 P/W
Current loan approx 261K
Approx LVR 68%
Will be refinancing with a different lender and 30k will be taken to pay out a ex. This 30K is tax deductible as I have already cleared this matter with the ATO.
So after the payout and the break costs all up approx 32K new LVR sitting at about 77%
Scenario 1.
So if I just sit on the one IP with the current loan of 293K with Westpac’s 4.99% IO 3yr fixed rate, this property will be cash flow pos
Interest @ 4.99% $14620
Rates $1200
Insurance $900
Water $724
PM Fees $1700
Total Expense $19144
Total Income $20800
Left Over Cash $1656 Approx
Yes this is a good situation to be in, however will not achieve what I want by just sitting on the one property.
Scenario 2
Buy 2nd IP in the Darwin market; this would likely be a higher end unit. Let’s say it will cost 330K,
Not to sure what loan I will be using as of yet… however it will be fixed.
Purchase Cost 330K
Stamp Duty $12,286
Other costs $2000
Deposit drawn from IP 1 $35,000
Total Cost $309,286
LVR 93%
Not including LMI as I am not to sure what this would cost, so possible LVR at about 95%
Rental yields are approx 5.6% for the properties I am look at.
So lets say by the time I get this property I can get a 5 yr fixed IO loan for 309,286 at about 6%
IP 1
Will take $40,000 out, use $35,000 as deposit and have a $5,000 buffer
So total loan on IP 1 will now be 333K
Interest + expenses $21140
Rental Income $20800
= neg $340 P/A
IP 2
Interest @ 6% $18557
Rates $1200
Body Corp $1900
PM Fees $1800
Insurance $800
Total Expense $24257
Total Rental Income $18720
= neg 5537 P/A
Total Expense $45397 (not including any tax benefits into these figures)
Total Income $39520
= neg $5877 P/A
$226 P/F
Total Loans $642,286
Total Value $713,000
Total LVR 90%
Scenario 3
I buy a bog box unit in Townsville for 180K, with the intention that it will become an IP once I get posted. Also I will attempt to improve the unit depending on funds and time left in location.
Once again I will use a $35,000 deposit and keep $5,000 as a buffer.
Being a defence member with more that 5yrs service I can utilise the Defence Home Ownership Assistance Scheme (DHOAS) http://www.defcredit.com.au/DHOASAdvantageHomeLoans
Purchase Price $180,000
Stamp Duty $2000
Legal Fees $2000
Total Purchase $184,000
Deposit $35,000
Loan $149,000
Total loans $482000
Loan repayment $1001 P/M
Minus DHOAS $220 P/M approx
= $781 P/M
On going costs would include rates and body corp. approx $3200 which is about $ $250 P/M
Total out goings for PPOR would be approx $1031 P/M, which would involve me downsizing from a DHA 3 bedroom house only costing me $600 per month into a small two bed room unit with no or very small yard. Keep in mind I have my daughter on weekends.
So for the same price as holding two quality IP’s, give or take a few dollars I could have a PPOR and 1 IP total value of 560K or 2 IP’s and I continue with cheap rent and big house with a total value of 710K… I am more inclined with the 2 IP option however if there is anyone that has some other ideas that I could take into account please share…..
Cheers,
Sorry for the long post