What next?

[Sara]

I am after a bit of advise here as I am quite new to the investing game and don't know what my next step will be.

I purchased my first IP close to 3 years ago and rented it out to the near point of it being + geared with an 8% annual growth. Since then I was able to acquire enough equity in that IP to purchase my second property (August this year) which I am now living in.

I feel have been stretched to the limit in terms of borrowing finance and even though I am happy, I would like to figure out a way in which I can purchase a third property in the near future

Please help as I am a little stuck

 

[Rolf Latham]

Hi Sara

Can YOU afford more $ on a weekly basis ?

ta

rolf

 

[BuildingBlocks]

I am after a bit of advise here as I am quite new to the investing game and don't know what my next step will be.

I purchased my first IP close to 3 years ago and rented it out to the near point of it being + geared with an 8% annual growth. Since then I was able to acquire enough equity in that IP to purchase my second property (August this year) which I am now living in.

I feel have been stretched to the limit in terms of borrowing finance and even though I am happy, I would like to figure out a way in which I can purchase a third property in the near future

Please help as I am a little stuck

- Move out of your 2nd and rent somewhere cheaper.
- Rent out a room or two in your current place.
- Earn more money.

You may also need a change of strategy for an instant value add on purchase (renovate, subdivide etc).

 

[Aaron_C]

Without knowing more information, the only way to afford more property is to improve your servicing (i.e. your income). Buying higher yielding property won't usually cut it because property has to yield 12% for it to have a positive impact on your servicing.

So you either need to get a better paying job, or fix some of your existing loans at a lower interest rate, and go to a different lender for a new loan.

 

[locko24]

Get married.

 

[Don K]

Try CF+ property. Some lenders will take 100% of rent income. But depends on your finance as Aron said.

 

[Aaron_C]

Try CF+ property. Some lenders will take 100% of rent income.

But those lenders will charge you more in interest rate - so it negates the benefit.

 

[Don K]

AMP may be ok. But have a chat with your mortgage broker.

 

[mins]

AMP just approved my loan so cudos to them for that. Downside is it took 3 weeks and a lot of lost information.

 

[lmo]

You may also need a change of strategy for an instant value add on purchase (renovate, subdivide etc).[/QUOTE]

Subdividing is a good way to increase the property value, even if you don't want to sell off the property as two separate lots of land with individual titles. builder developers look for properties that have plans and permits already done for them and are willing to pay a much better price then just the block itself.