In theory this works however you have to factor in all costs. i.e equity loans @.6.5%, buyers agent fees ($14k per property), stamp duty, rates, agent fees, maintenance. Calculate your net yield, not gross. If the numbers still work and you can manage the risk then go for it.
The equity extraction strategy can work well only if there are no major personal issues, like medical conditions or job loss followed by long unemployment or lower salary. The "rainy days" funds might be not sufficient, and if this happens, we would have to sell the property at a loss. So, it is not always gold what it is shining...
The only thing people don’t really talk about much is the impact of pulling out that equity in your home loans, your loan has now increased by $100k so your repayments are much higher so your tight rope of negatively geared vs positively geared just got tighter
With the two properties. I can handle the mortage of the first one my self. But I doubt the rent would be sufficient to take care of the mortage for the second one. So if we keep on getting properties, we need to put some repayments towards it from our pocket on top of the rent.
This is the key issue here. If you have expenses you can't really cut i.e groceries, daycare etc, and your already in a high paying job, soon as you punch a second loan into a borrowing calculator, serviceability for the third property drops down to not even 100k.
Thank you for the info. What about the income that person should have for investment property? I am struggling to meet the personal income for the investment loan.
I own my own house and got in contact with the bank. Turns out none of this matters unless you already earn huge amounts because the rent on properties doesn't effect your income evaluation enough to matter.
I got 3 house in Melbourne land tax cost me $20000 this year and this is the worst investment I have made in Australia. I got the worst feeling about those property. investment.there is no money in it . is there any advice for me
And then interest rates go up 3% in 12 months and all your investments go backwards at the rate of $500/week per property that you need to have the income to sustain.
This channel was actually created to publicly bag out his uncle and the property content is a nice little side bonus
My true intentions have been revealed 🙈
In theory this works however you have to factor in all costs. i.e equity loans @.6.5%, buyers agent fees ($14k per property), stamp duty, rates, agent fees, maintenance. Calculate your net yield, not gross. If the numbers still work and you can manage the risk then go for it.
The equity extraction strategy can work well only if there are no major personal issues, like medical conditions or job loss followed by long unemployment or lower salary. The "rainy days" funds might be not sufficient, and if this happens, we would have to sell the property at a loss. So, it is not always gold what it is shining...
What about home loan repayments for the loans? The rental income won’t cover that in the current market
The only thing people don’t really talk about much is the impact of pulling out that equity in your home loans, your loan has now increased by $100k so your repayments are much higher so your tight rope of negatively geared vs positively geared just got tighter
With the two properties.
I can handle the mortage of the first one my self.
But I doubt the rent would be sufficient to take care of the mortage for the second one.
So if we keep on getting properties, we need to put some repayments towards it from our pocket on top of the rent.
Whiteboard Finance = happiness
Would love to see how you manage your property currently and your roadmap for the next 5-10 years
Wouldn't you need to meet the serviceability for the loans?
Great concept but what about serviceability? When did went to refinance only a % of rent was taken into account as income.
This is the key issue here. If you have expenses you can't really cut i.e groceries, daycare etc, and your already in a high paying job, soon as you punch a second loan into a borrowing calculator, serviceability for the third property drops down to not even 100k.
exactly my thought, each time you borrow from the property for more equity, its increasing the loan and now you need to pay more each month.
Nice one Ravi.
Thank you for the info. What about the income that person should have for investment property? I am struggling to meet the personal income for the investment loan.
Are the rental yields you mention net or gross?
Thank you 😊
Do you really have that mentioned uncle? 😅
I own my own house and got in contact with the bank. Turns out none of this matters unless you already earn huge amounts because the rent on properties doesn't effect your income evaluation enough to matter.
How do you find a 500k house in a good emerging area!!!
We find at least 5-10 houses every week like this
I got 3 house in Melbourne land tax cost me $20000 this year and this is the worst investment I have made in Australia. I got the worst feeling about those property. investment.there is no money in it .
is there any advice for me
invest in Rural NSW Country Town
problem with structuring
@@arifzaman3428 If you do this prepare to pay high on council rates ☺
Land tax increased this year? It will translate into the tenants
What about rates, maintenance, insurances, stamp duty... Youre missing a lot.
And then interest rates go up 3% in 12 months and all your investments go backwards at the rate of $500/week per property that you need to have the income to sustain.
👍
The 12% out of the 500k... You get only 80% out of the 60k equity, right? That needed to be clear on the video
Can you please help me with my homework and I will be willing to pay you
Sure