Using Australian IP to finance IP overseas

[Sydniygirl]

Hello All,

I need some advice.

I own an IP valued in August last year at $460K. There is no mortgage. It is currently tenanted at $465pw. Would it be possible to take out a LOC on this property to purchase an IP in the UK? I am looking at properties valued the equivalent of A$300,000 in a famous university town where the property would rent out for between A$1,670 and $2,000 pm.

On my basic calculations the rent from the Australian IP plus rent from the UK IP less the usual costs would cover repayments on the LOC but would banks lend for this purpose? If the bank took first mortgage over Australian IP would they also require mortgage over UK IP?

Thanks in advance for your help.

 

[Rolf Latham]

Hi

Assuming you have the serviceability, quite a few lenders will cash out for that purpose.

A mortgage over the UK property will not be required.

This same strategy is how most people have bought USA based IPs.

ta
rolf

 

[Colin Rice]

Certain banks in Australia will allow you to borrow up to 90% of your current Australian property's value on a LOC also called a Masterlimit with the purpose of funds declared to be for "future investment purposes".

460k x 90% = $414,000 max. possible borrowings providing you have the ability to repay the debt via a combination of employment/business income & existing rental income.

The security for the new debt will be the existing IP so mortgage over the UK IP would not be required.

 

[Qlds007]

Assuming you hold a UK Passport you could always looking at taking a loan from a UK lender for say 50% of the purchase price (I assume the town begins with either a C or an O).

Admitedly the choice of lenders in the UK is very very limited even as UK Passport holder but it might be better than tying up all of your equity.

 

[SeafordSunshine]

Passport

Hello,

Best of luck..

I think you only need residency, not a passport to buy in the UK?

I agree with the returns, but estate agents charge plenty more than WA there

University towns can be excellent, but they have very long summer holidays = vacancy periods all over the world..

I do hope this helps!
SeafordSunshine