Setting up IP2

Hey everyone,

I've been a long time lurker and have unfortunitley allow work to get the better of my over the last few years. Anyhow, I've initiated my 'get out of the rat race' strategy and purchased a investment property yesterday.

I just wanted to float my current strategy and get some opinions on the structure.

I currently own 50% of a invement property with my brother and will be drawing down some equity from that to assist with the deposit.

I then am intended on financing as much as possible as interest only with an off-set account to enable me to save for the next deposit.

All income from the property will go into a seperate bank account that will solely be for this property (all monies in/out) to make it easier from a tax perspective.

I plan on purchasing a property per year moving forward and just wante to double check that I'm not going to trip myself up on any traps for young players.

FYI; Property it within 5km of Brisbane CBD, $590k after all purchase costs, returning $700p/w. Long term stragety is to hold and continue purchasing property that doesn't limit my cashflow by much.

This is a little rushed as I'm still tying up loose ends at work and trying to chase finance, so apologies for the loose nature of it.

Thanks in advance.

Felix
 
I currently own 50% of a invement property with my brother and will be drawing down some equity from that to assist with the deposit.

I plan on purchasing a property per year moving forward and just wante to double check that I'm not going to trip myself up on any traps for young players.

sort that joint ownership sooner rather than later,because it will become a liability at some point that may stop you moving fwd

ta
rolf
 
What can I do with the joint ownership? I am familiar with the way the bank assesses it :(

No non deductible debt & there's around 140k equity that I can draw down against with my brothers consent.
 
5. Use a lender which apportions debt to ownership.

*this is a poor stop gap which you'll still run into issues with over the long term.

I generally find 50/50 ownership's end up resulting in one partner buying the other out due to this issue.
 
So a bit of an update;

I've managed to get the following

Purchase price: $571,000
Deposit: $50,000
Stamp Duty: $20,000
LMI: $20,000
(round figures)

Total borrowed amount: $562,950 which is actually a total LVR of 98.59%

Return: $700 p/w

I'm trying to wrap my head around spending $20k on mortgage insurance. My theory is that being able to add this to the mortgage of a property that I'll be holding long term. Makes it no such a huge hit. Additionally, I am able to set up an offset account to park all my savings for my next investment deposit - this will allow me to purchase the next property faster and less cash/equity is tied up in this place with the LVR.

I guess my query is; how much will this LVR be held against me for my next purchase, even if I had a decent deposit.

Thanks in advance.
 
Bankwest from the sound of things.

Assuming you will get some verifiable growth on Ip2 and wont use BWA for ip3, then the current lvr isnt critical.

ta

rolf
 
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