Too negatively geared?

From: Sherlock .


I have recently sold a property I held for 4 years and returned a very good gain, approx. 80%

I am wanting to buy back into the same area but finding that the rents have not kept pace with the capital growth.

I am kind of keen on this area but should I be looking else where? But then most of Melb. looks the same in suburbs that have reasonable prospects of capital growth.

I hold substantial equity in my own property and wonder whether I should be sophisticated strategy ie some +ve geared IPs and -ve geared IPs

I have a strong sense that I am in a very good position to do well but I'm not sure how. Somehow I think I should have been at that pub crawl.

Any pearls out there?

SH
 
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Reply: 1
From: Rolf Latham


Hi Sherlock


The key is equity is king (or queen if you like). If you have sufficient equity nothing need to get in your way.

Book in for Uncle Steve's Next course.

Ta

Rolf
 
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Reply: 1.2
From: Shelly R



Hi Rolf,
From my experience equity can be pretty much
useless without proof of serviceability.
In fact I'm a bit over the equity rave.
My bank manager has people who come to her owning land worth several million $ but without good tax figures......no loan.
Cheers Shelly
 
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Reply: 1.2.1
From: Rolf Latham


Hi Shelly

I should have qualified my statement.

Equity in an asset that a mortgage insurer considers to be a "quality" asset.

If anyone comes to me or Steve Navra with excess equity as per above will get finance.

Steve's methods and therefore lending needs are a bit different to mine, but in both cases proof of exisitng serviceability is NOT required.

A Garden variety Low/No Doc lend at 6.3 at up to 500 000 per security at maximum Loan to Valuation ratio of 75 %is available to anyone that meets the following criteria:

1. The security is metro or major regional and is non-specialised residential (house or unit)

2. They are a full time imvestor and/or are self employed with poor or NO tax figures.

3. They have a clean Credit History.

4. The use of the funds is for investment or business purposes.

Similar products are available for PAYE but not at that rate.

Steve's methods dont even require No 2 or 4.

I stand by statement that equity is king/queen. If one has lots of equity and one cant get a loan its because either

1. The security offered is not suitable for Mortgage Insured residential mortgage lending purposes.

2. There is a credit problem in the past


Ta



Rolf
 
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Reply: 1.2.1.1
From: Gordon Austin


Hi Rolf,

"2. They are a full time investor and/or are self employed with poor or NO tax figures."

Could you please expand on the above statement. It's probably a silly question but having just left the PAYE workforce (by choice) I am very interested in knowing in particular what constitutes a "full time investor" and the associated advantages and disadvantages.

Thanks - Gordon
 
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Reply: 1.2.1.1.1
From: Rolf Latham


Hi Gordon

It depends, some products want you to be self employed for two years, others arent too fussy. However, ALL these loans are generally mortgage insured so a bit of a history of say 3 months as NON PAYG would be good, this sort of shows you can survive without your job.

Ta



Rolf
 
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