Hi everyone, hoping to find someone else with this strategy, or someone to tell me why it won't work before I go ahead and do it
I will have a 50k + costs deposit to purchase IP#1. I have a PPOR but no equity to draw from it yet (currently at 80%LVR, not going to refinance to higher for various reasons).
I have recently begun reading about managed funds as an income stream, particularly Navrainvest which I read is returning 20% growth, 15% as income currently.
So I have two scenarios in mind:
1 - Purchase $250,000 PPOR, $50,000 deposit
$1320 monthly repayments, principle & interest at 6.9% over 30 years
$~400 monthly costs (rates, BC etc)
Rent $1000 monthly
Shortfall = $720 monthly
2. Purchase $250,000 PPOR, No deposit 100% finance
$1760 monthly repayments, principle & interest at 7.6% over 30 years
$~400 monthly costs
Rent $1000 monthly
$625 monthly income from $50,000 invested in 15% income fund
$583 monthly income $100 000 margin loan invested 15% income fund, less 8% interest
Shortfall = $48 monthly
Additional benefit is the 5% capital growth on $150,000 worth of managed funds
I have a very simple understanding of investment strategies at the moment, and if buying into shares/managed funds is this good, why don't more people do it? Is the risk simply too high? What am I missing?
I will have a 50k + costs deposit to purchase IP#1. I have a PPOR but no equity to draw from it yet (currently at 80%LVR, not going to refinance to higher for various reasons).
I have recently begun reading about managed funds as an income stream, particularly Navrainvest which I read is returning 20% growth, 15% as income currently.
So I have two scenarios in mind:
1 - Purchase $250,000 PPOR, $50,000 deposit
$1320 monthly repayments, principle & interest at 6.9% over 30 years
$~400 monthly costs (rates, BC etc)
Rent $1000 monthly
Shortfall = $720 monthly
2. Purchase $250,000 PPOR, No deposit 100% finance
$1760 monthly repayments, principle & interest at 7.6% over 30 years
$~400 monthly costs
Rent $1000 monthly
$625 monthly income from $50,000 invested in 15% income fund
$583 monthly income $100 000 margin loan invested 15% income fund, less 8% interest
Shortfall = $48 monthly
Additional benefit is the 5% capital growth on $150,000 worth of managed funds
I have a very simple understanding of investment strategies at the moment, and if buying into shares/managed funds is this good, why don't more people do it? Is the risk simply too high? What am I missing?