I'm thinking about buying our first investment unit and am after some thoughts from others. I'm pretty bearish on property in general but know the area well that I'm considering. We are currently a long way ahead on our ppor mortgage with over 200k sitting in offset. We could pay it off completely in two years and this is one path we will likely follow. An alternative would be to borrow some more for an ip but have a few questions about it.
I've heard it can be good to go for a yield of about 6%. Is this true. A place we checked out on sat looked the goods. Asking 315k with a long term tenant whose rent has been lowish at about 280. So at that price I was guessing yield is below 5% so maybe not a go. Wondering if when calculating yield you should include full purchasing costs, stamp, pest and build and legals and loan set up. I guess you should.
One reason we are thinking about jumping in is the area we are looking does seem to have good growth potential compared to soring prices nearby. Perhaps a better alternative might be to wait another few years, pay off the home loan and save a deposit for an ip. There is a reasonable chance we might miss a local boom if we wait, but alternatively things could just stay flat. I don't think there's much chance of an actual decline in the town we're looking at although surrounding areas could fall.
Would appreciate any advice or suggestions from all
I'm thinking about buying our first investment unit and am after some thoughts from others. I'm pretty bearish on property in general but know the area well that I'm considering. We are currently a long way ahead on our ppor mortgage with over 200k sitting in offset. We could pay it off completely in two years and this is one path we will likely follow. An alternative would be to borrow some more for an ip but have a few questions about it.
I've heard it can be good to go for a yield of about 6%. Is this true. A place we checked out on sat looked the goods. Asking 315k with a long term tenant whose rent has been lowish at about 280. So at that price I was guessing yield is below 5% so maybe not a go. Wondering if when calculating yield you should include full purchasing costs, stamp, pest and build and legals and loan set up. I guess you should.
One reason we are thinking about jumping in is the area we are looking does seem to have good growth potential compared to soring prices nearby. Perhaps a better alternative might be to wait another few years, pay off the home loan and save a deposit for an ip. There is a reasonable chance we might miss a local boom if we wait, but alternatively things could just stay flat. I don't think there's much chance of an actual decline in the town we're looking at although surrounding areas could fall.
Would appreciate any advice or suggestions from all
Where are you buying. Which city or suburb.
Take risks - if you win you will become wealthy, if you lose you will become wise
Northern nsw, ballina maybe. A bit of a retirement village but changing too. Really pretty spot and I know the area very well. 20 minutes to byron bay with a ridiculous median of around 800k. Good hospital and airport.
Northern nsw, ballina maybe. A bit of a retirement village but changing too. Really pretty spot and I know the area very well. 20 minutes to byron bay with a ridiculous median of around 800k. Good hospital and airport.
I couldn't help you, it will come back to local issues. Do your homework, don't rush in.
Best of luck.
Take risks - if you win you will become wealthy, if you lose you will become wise
I'm thinking about buying our first investment unit and am after some thoughts from others. I'm pretty bearish on property in general but know the area well that I'm considering. We are currently a long way ahead on our ppor mortgage with over 200k sitting in offset. We could pay it off completely in two years and this is one path we will likely follow. An alternative would be to borrow some more for an ip but have a few questions about it.
I've heard it can be good to go for a yield of about 6%. Is this true. A place we checked out on sat looked the goods. Asking 315k with a long term tenant whose rent has been lowish at about 280. So at that price I was guessing yield is below 5% so maybe not a go. Wondering if when calculating yield you should include full purchasing costs, stamp, pest and build and legals and loan set up. I guess you should.
One reason we are thinking about jumping in is the area we are looking does seem to have good growth potential compared to soring prices nearby. Perhaps a better alternative might be to wait another few years, pay off the home loan and save a deposit for an ip. There is a reasonable chance we might miss a local boom if we wait, but alternatively things could just stay flat. I don't think there's much chance of an actual decline in the town we're looking at although surrounding areas could fall.
Would appreciate any advice or suggestions from all
Make sure you get the finance right. Your post alludes to you not considering correct financing.
If you still owe money on your PPOR then borrow the whole lot (+costs) for the IP. Secured by your PPOR and IP. Do not cross the loans and make sure the loan secured by your PPOR is separate from the original loan - ie a split. That set up means you won't pay LMI and the whole loan will be deductible.
Does your research show that $315k is market price?
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