What is your leverage?
- Thread starter frehnejc
- Start date
Perhaps different respondants? Maybe the more conservative have hung around ss while others have moved on? Many investors I know have sold down property so that would also impact the numbers.
I have had relatively recent valuations and have lowered them further in light of being more realistic.
69.8% 
but that's on a mil$ property, so there's about $100k to play with before requiring LMI - but i plan on using it.
but that's on a mil$ property, so there's about $100k to play with before requiring LMI - but i plan on using it.
That's the line I was thinking about. Did the others jump or were they pushed? Did they "see the light" or has their position just improved with time?
Bit hard to have a poll of ex-members.
...too right they will be conservative.....land content only...!
We have two types of valuations in SA; Land Tax is based on unimproved value, whereas Council rates are based on Land plus improvements. Unless you are a property investorand pay Land Tax, most people dont see what the Land Value alone is worth.
Pushka, on that subject - have you received your land tax assesment in the mail yet (or any other SA people here)? I can't remember when it generally comes out, but I received my ESL assesment over 2 months ago.
So far the average LVR as per the poll is 61% as an FYI:
% applied Debt on $1mil Number
90% + 92.50% 925,000 8 7,400,000 88,000,000
70-90% 80.00% 800,000 23 18,400,000 60.74%
50-70% 60.00% 600,000 35 21,000,000
30-50% 40.00% 400,000 13 5,200,000
20-30% 25.00% 250,000 1 250,000
Less than 20% 15.00% 150,000 8 1,200,000
Based on my assumptions anyway
% applied Debt on $1mil Number
90% + 92.50% 925,000 8 7,400,000 88,000,000
70-90% 80.00% 800,000 23 18,400,000 60.74%
50-70% 60.00% 600,000 35 21,000,000
30-50% 40.00% 400,000 13 5,200,000
20-30% 25.00% 250,000 1 250,000
Less than 20% 15.00% 150,000 8 1,200,000
Based on my assumptions anyway
1 PPOR, 2 IP, 1 block of land 66%
Debt:income is 5.88, which makes me a little nervous after seeing other peoples numbers...
And happy to make the 66% 80%, just snooping around at the moment.
Noel
Debt:income is 5.88, which makes me a little nervous after seeing other peoples numbers...
And happy to make the 66% 80%, just snooping around at the moment.
Noel
Could someone explain the debt to income ratio?
Is that using hypothetical figures
Debt - 100,000
Income - 50,000
2:1
I'm only presuming the higher the ratio, the greater the percieved risk profile of the investor?
Is that using hypothetical figures
Debt - 100,000
Income - 50,000
2:1
I'm only presuming the higher the ratio, the greater the percieved risk profile of the investor?
Not quite.
Its like this:
Annual interest on your Debt: $40,000
Annual income: $100,000
Ratio: is $40,000:$100,000 which can be expressed 1:2.5.
Anything less than 1:2.5 (for example 1:1.5) would be considered "debt stressed" for a company.
Another way to say it is to say you spend 40% of your gross income on interest payments.
I currently pay 39% of my gross income on interest payments and I consider that stretched to the absolute max. I will not push beyond that level which I consider to be the line between "comfortable" and "scary".
Last edited:
Hi
http://en.wikipedia.org/wiki/Debt-to-income_ratio
This is different to Debt/Income which is total debt/annual income
For instance if i owe 2 Mill and my income is 200K then I have a debt/income of 10. The debt to income ratio will be different as it calculates the percentage of a consumer's monthly gross income that goes toward paying debts as Boomtown described on an annual basis. This may P&I, IO etc
Cheers
Shane
http://en.wikipedia.org/wiki/Debt-to-income_ratio
This is different to Debt/Income which is total debt/annual income
For instance if i owe 2 Mill and my income is 200K then I have a debt/income of 10. The debt to income ratio will be different as it calculates the percentage of a consumer's monthly gross income that goes toward paying debts as Boomtown described on an annual basis. This may P&I, IO etc
Cheers
Shane
