Hi all! Long time lurker and observer here.
I am about to start the process of buying my first IP in Melbourne, and want to make sure I set things up the best I can now. I have done lots of reading here, but could do with some of your opinions as well.
I don't have much of a long term strategy as of yet, I just want to start out with the one IP and see how things pan out as I go. I may end up buying more and starting to work on a portfolio, or I may decide two properties are enough and move to Bali and be a hippy instead!
I am currently in the highest tax bracket (47%?), and will be for another 6 months at least. Job security may change after that time. I have my PPOR in Perth, purchased for $450k two years ago, now with $390k remaining and 100k in the offset. I would say it's still worth roughly the same now. My budget for an IP is around the $500-$600k mark, and after rent I don't want to be out of pocket by more than $300 a week, obviously the less I'm out of pocket the better.
I'm thinking it's best to use the equity from my existing PPOR to buy the investment, but I'm not sure if I should go with an IO or P&I loan at the moment. I'm sure I can change from one to the other down the track, but there would be fees involved? Also, if using my equity from PPOR, do I have to stay with the same lender? I am worried about the two properties being tied to each other if using equity as a deposit on the IP.
I have more questions, but I think this is a good start for now
Thanks in advance!
I am about to start the process of buying my first IP in Melbourne, and want to make sure I set things up the best I can now. I have done lots of reading here, but could do with some of your opinions as well.
I don't have much of a long term strategy as of yet, I just want to start out with the one IP and see how things pan out as I go. I may end up buying more and starting to work on a portfolio, or I may decide two properties are enough and move to Bali and be a hippy instead!
I am currently in the highest tax bracket (47%?), and will be for another 6 months at least. Job security may change after that time. I have my PPOR in Perth, purchased for $450k two years ago, now with $390k remaining and 100k in the offset. I would say it's still worth roughly the same now. My budget for an IP is around the $500-$600k mark, and after rent I don't want to be out of pocket by more than $300 a week, obviously the less I'm out of pocket the better.
I'm thinking it's best to use the equity from my existing PPOR to buy the investment, but I'm not sure if I should go with an IO or P&I loan at the moment. I'm sure I can change from one to the other down the track, but there would be fees involved? Also, if using my equity from PPOR, do I have to stay with the same lender? I am worried about the two properties being tied to each other if using equity as a deposit on the IP.
I have more questions, but I think this is a good start for now
Thanks in advance!