Too Rent Reliant!



From: Michael Vaughan

Hi All,
I have recently hit a wall preventing me purchasing any further rental properties. I am self employed and as a result I try to minimise the amount of tax I pay. As a result my net profit after expenses is low and the banks a telling me that my income can not service any investment property loans in the near future. Rule of thumb is that loan repayments can not be more than 85% of your income or they are deemed to be too rent reliant. By the way all my rental properties are positively geared. Interested to hear from people who have come across similar problems.


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Reply: 1
From: Jeremy Laws

Everyone hits one of two walls eventually. Equity or cashflow. Sometimes both! find a way to get around it, it is usually possible.
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Reply: 1.1
From: Sim' Hampel

Indeed, some avenues to try as discussed here on the forum are Steve Navra who can generally help out with this type of issue and independent mortgage brokers like Rolf Latham who can help with just about anything. Miracles cost extra.

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Reply: 1.1.1
From: Tibor Bode

Hi Michael,

Another broker (who actually helped me and got his name via Rolf) is Frank Shead.
His web site is
He specializes in people who have similar issue (or even worse) than you do. I other exactly the same problem as you with some additional (CRA) problem and got the loan what 2 other institutions (one via broker)
could not do.

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Reply: 2
From: Fiona H

What you are looking for is what's called "asset lending". This is a loan purely based on the property - you dont need any income documents (but still different to a "lo doc loan").

The downside I've found with asset lending is they usually want a higher LVR (60-70%) and/or higher rates.

There is also lending via solicitors etc which again, usually attract premium rates.

Try a good broker who will go in to bat for you. We have the same cash flow problem and our broker just keeps persisting and pointing what great investors we are, solid portfolio of several properties etc etc etc...

Keep trying - there is an amazing amount of sources.
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Reply: 2.1
From: Rolf Latham

Hi Fiona

Suncorp have recently released an asset lend product with an 80 % LVR with a pre RBA rise rate of 5.57 for 150 k or more for investment purposes only. Its pretty bloody good even though there are some small hurdles to overcome.


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Reply: 2.1.1
From: Fiona H

Thanks Rolf, my broker had mentioned that product, its only just come out.

He is finding it a bit tricky too... says he had a good deal knocked back for no big reason. Reckons they are being very conservative whilst they kick off - but here' hoping!!! I'm gonna need one very soon.

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