Recently logged on to Somersoft again and realised with horror that I was last on here 10 years ago - where did the years go! Ten years ago I was building up to buying my first investment property but like many I never took that step. Here I am again, ten years, ten foreign countries and one marriage later!
I still have original PPOR which has become IP1:
Loan: $210K
Value: $400K
Equity: $110K
Rent: $450/wk
Starting full time employment Jan 2015, $55K/yr (probation period 6 months but hoping that will only be 3 months). Have $45K cash savings so with equity of $110K that totals $155K to get PPOR and IP2 in 2015.
Rough plan:
PPOR ~$400K
Costs ~$13K (includes $5K LMI)
Deposit $48K
Loan $352K
LVR 88%
My contribution ~61K (from equity in IP1)
IP2 ~400K
Costs ~20K (includes $5K LMI)
Deposit $48K
Loan $352K
LVR 88%
My contribution ~$68K ($49K from equity in IP1, $18K from cash savings)
That should leave me a buffer of $27K cash which I will offset against PPOR.
My reason for going to 88% LVR and paying LMI on the PPOR is that if I go to 80% and avoid LMI my contribution goes up to $87K which will leave me with no cash buffer at all - I will literally have to put in every cent of my savings. Paying $5K LMI seems to be reasonable for having a $27K buffer. (Also 88% LVR seems to be a breakpoint above which LMI goes up a lot)
Chances are PPOR will be less than $400K as I will look for something with value adding potential - I don't mind living in the middle of renovations. IP2 might be more than $400K as I want to look outside of Cairns, maybe Brisbane.
What would you do with 110K equity, 45K cash, income of 55Kpa gross and 450pw rent? Does this make sense? TIA
I still have original PPOR which has become IP1:
Loan: $210K
Value: $400K
Equity: $110K
Rent: $450/wk
Starting full time employment Jan 2015, $55K/yr (probation period 6 months but hoping that will only be 3 months). Have $45K cash savings so with equity of $110K that totals $155K to get PPOR and IP2 in 2015.
Rough plan:
PPOR ~$400K
Costs ~$13K (includes $5K LMI)
Deposit $48K
Loan $352K
LVR 88%
My contribution ~61K (from equity in IP1)
IP2 ~400K
Costs ~20K (includes $5K LMI)
Deposit $48K
Loan $352K
LVR 88%
My contribution ~$68K ($49K from equity in IP1, $18K from cash savings)
That should leave me a buffer of $27K cash which I will offset against PPOR.
My reason for going to 88% LVR and paying LMI on the PPOR is that if I go to 80% and avoid LMI my contribution goes up to $87K which will leave me with no cash buffer at all - I will literally have to put in every cent of my savings. Paying $5K LMI seems to be reasonable for having a $27K buffer. (Also 88% LVR seems to be a breakpoint above which LMI goes up a lot)
Chances are PPOR will be less than $400K as I will look for something with value adding potential - I don't mind living in the middle of renovations. IP2 might be more than $400K as I want to look outside of Cairns, maybe Brisbane.
What would you do with 110K equity, 45K cash, income of 55Kpa gross and 450pw rent? Does this make sense? TIA