Y-man the answer is B. You still owe the bank $600k, the offset account doesn't pay off the loan, it only affects how the interest is calculated.
What's your asset-debt ratio limit?
- Thread starter onion33
- Start date
LVR will be around 51% in a couple of months when current development is finished.
Plan on doing another development which will push LVR to 68-70%
Not very efficient LVRs ad D.T. mentioned but the highest I can get due to finance limitations on developments.
Plan on doing another development which will push LVR to 68-70%
Not very efficient LVRs ad D.T. mentioned but the highest I can get due to finance limitations on developments.
Yes, 12 months reserve to cover no rent at all (this would be pretty unlikely in our circumstance, but say we only had 3 months reserve and no rent for 3 months, so then we'd have 0 cash reserve, which would make me totally panicked, so 12 months keeps enough for unforeseen additional expenses and no rent for a few months while still leaving enough of a buffer to have reserves while we try to get more income in). And in the meantime the money is sitting in an offset account, so it's still working for us. This keeps my anxiety levels low
We don't have separate income protection insurance. We have what's offered in our Super, and we do have landlord insurance, i think that would take awhile to get money from though, so wouldn't want to have to depend on that to stay afloat.
I use the interest rate today, basically our current monthly interest payments x 12, if interest rates were higher, then I would want to have abit more in reserve.
Good answers.
55% LVR if looking at properties alone.
53% Debt to total assets
The Y-man
For Australian property my LVR is <20% - Why? Mainly because property prices have increased so much combined with consistently paying down the investment loan over the last 4 years.
Would consider increasing overall LVR on Australian property to 40% if an opportunity arose but happy to sit tight and focus on other things until interest rates increase 1 or 2 % points.
LVR in relation to Listed shares is around 50% (margin loan) and I view this as still conservative with the advantage of being able to sell shares at any point if desired.
Happy with low LVR on Australian property as I know my personality. If I borrowed more than say 40% I would focus on it too much and not enjoy the things that I should focus on in life.
It works for me and one of the best pieces of advice I have received is to "know oneself"
A low LVR means I miss opportunities but the flipside for me is that it frees my being to enjoy other things, I seek balance as much as I can.
regards
Would consider increasing overall LVR on Australian property to 40% if an opportunity arose but happy to sit tight and focus on other things until interest rates increase 1 or 2 % points.
LVR in relation to Listed shares is around 50% (margin loan) and I view this as still conservative with the advantage of being able to sell shares at any point if desired.
Happy with low LVR on Australian property as I know my personality. If I borrowed more than say 40% I would focus on it too much and not enjoy the things that I should focus on in life.
It works for me and one of the best pieces of advice I have received is to "know oneself"
A low LVR means I miss opportunities but the flipside for me is that it frees my being to enjoy other things, I seek balance as much as I can.
regards
I have no limit. I'm at 78% at the moment plus 4% (12 months) cash on hand but will be purchasing again soon and back up towards 90%.
Much like D.T., I buy when I can.
Much like D.T., I buy when I can.
Sounds very good everyone.
I have enough cash reserve to cover two properties for 12 months. So I think I'll start looking for ip2. Just don't want to tell our parents because they will stress me about it
Land tax was easy enough to understand. Just have to factor it into my cash flow scenarios.
As for trusts, quite confused! If you need to rely on negative gearing does that rule trusts out for now?
I have enough cash reserve to cover two properties for 12 months. So I think I'll start looking for ip2. Just don't want to tell our parents because they will stress me about it
Land tax was easy enough to understand. Just have to factor it into my cash flow scenarios.
As for trusts, quite confused! If you need to rely on negative gearing does that rule trusts out for now?
The only stupid question is the one that isnt asked. No-one thinks you're a dill for asking a legit question.
LVR = Loan to Value Ratio = Total loans divided by total asset value (x100).
eg. Loan $200k / Value $250k = .8 (x100) = 80% LVR.
pinkboy
Chat with mentor went very well. Learnt a lot including that I could arrange a licensing agreement with the vendor of ip1. Because the property was vacant, the agreement allowed me to get early access, do initial repairs and conduct open for inspections PRIOR to settlement. I'll likely have a paying tenant day 1 after settlement.
I love all this property stuff. It makes me happy to go to work because I know it's now funding something I enjoy which will also allow me to retire early
I love all this property stuff. It makes me happy to go to work because I know it's now funding something I enjoy which will also allow me to retire early
Great stuff onion33,
I had similar situation with my first IP which has just gone unconditional.
Property was vacant so I negotiated with vendor with a "right to show property" clause in contract conditions.
Property is advertised for rent tomorrow and property settles on September 12 so hopefully tenanted from day 1 like yours..fingers crossed
Coota
I had similar situation with my first IP which has just gone unconditional.
Property was vacant so I negotiated with vendor with a "right to show property" clause in contract conditions.
Property is advertised for rent tomorrow and property settles on September 12 so hopefully tenanted from day 1 like yours..fingers crossed
Coota
What LVR did this investor start with? Has he always been conservative?
What is his ratio if you dont assume todays market value, and use the purchase price of each of the assets?
LVR currently at a bit below 90%.
Not stressed as have a quite substantial cash buffer in the offset, income is diversified (presently me ~50%, wife ~25% and rent ~25%), income is a fair bit more than expenses, recently signed up for income protection insurance, both of us are in professions which we can easily find another job quickly (at a lower $$ or wait for higher $$) and rentals are all in areas with good demand.
Not stressed as have a quite substantial cash buffer in the offset, income is diversified (presently me ~50%, wife ~25% and rent ~25%), income is a fair bit more than expenses, recently signed up for income protection insurance, both of us are in professions which we can easily find another job quickly (at a lower $$ or wait for higher $$) and rentals are all in areas with good demand.
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