Servicability

[holtk5]

What do you do when you have a few IP's under your belt, then your serviceability runs out? Is this where shares are more desirable to allow you to keep investing in IP's?
Kate

 

[Ausprop]

things get interesting now and you need to start picking a path... be it development, commercial, drawing on LOC, alternative investments, OTP speculation and so on

 

[holtk5]

Has anyone here been in this situation? Have you gotten throught it successfully, and what did you try? I myself am not in this situation, but it just got me thinking....

 

[alexlee]

I think serviceability is a very grey line. If one bank turned me down, I would ask another. Actually I would ask every bank and mortgage broker I knew, and only after they ALL turned me down would I say my serviceability has really run out.
Alex

 

[The Y-man]

Talked about extensively before - not sure what terms to search on though!

Some things we looked at:

1. Higher paying job (or pay rise on same job)
2. Income oriented managed funds
3. starting a business

Cheers,

The Y-man

 

[Brinkdude]

Cash Bonds

Hi

This topic has been discussed previously (of course). Try a search under "Cashbonds" and a range of threads appear discussing servicability. I get the impression that Cash bond don't work as well these days.

http://www.somersoft.com/forums/showthread.php?t=30049&highlight=cash+bond

Cheers

 

[eggnog]

Interesting bringing up cashbonds as a solution to the servicibility problem. My understanding from reading Rixters posts is that cash bonds are used to show income (without truly increasing income) to help get over the DSR. But isn't the problem of servicibility about not having enough income at the end of the day to pay off a loan. With that said why would anyone get a CB, apply for another full-doc loan and futher add towards their servicibility problems when, in the first place they didn't have enough proper income to service another loan.

 

[voigtstr]

I think income producing funds would help you more, would mitigate the rental shortfall from negatively geared properties. I think it becomes a balancing act to fine tune the amount of funds needed to keep the properties neutral. As equity allows, redraw more for more funds and more IP deposits.
Its what I'm going to try anyway

 

[holtk5]

Hi

This topic has been discussed previously (of course). Try a search under "Cashbonds" and a range of threads appear discussing servicability. I get the impression that Cash bond don't work as well these days.

http://www.somersoft.com/forums/showthread.php?t=30049&highlight=cash+bond

Cheers

Just understand i am a 'newbie'. I realise i may have brought up 'previous topics' from before i was here. Maybe you can direct me to where i should look up topics before i post them?

 

[Peter Parker]

What do you do when you have a few IP's under your belt, then your serviceability runs out? Is this where shares are more desirable to allow you to keep investing in IP's?

Though it will attract CGT, one possibility is to sell a place that's (i) appreciated greatly in value and (ii) you consider won't appreciate much more in the short term.

If you then put this money into another place or two (with better prospects and/or renovation potential) this may progress the portfolio.

 

[Peter_Tersteeg]

If you own a few properties, hopefully you've got some equity. This gives you all sorts of options.

 

[Rolf Latham]

Get a better broker or banker

AS PT says, if you have equity u have serviceability in almost all circumstances

ta
rolf