Purchasing my second property ($720,000 equity)
Hi guys, I am just after some advice and opinions on my current situation.
I will give you all a brief understanding of my situation at present.
I own 1x 2 bedroom split level apartment in Port Melbourne, half a block off the beach, there are only 8 apartments in the building, which is 3 stories high with beach and city views currently worth around $720,000 Fully paid off. We are living in this apartment at the moment. But if rented, would fetch around $610 p/w.
I have around $100,000 in savings. With no repayments owing on any loans or car loans.
My partner is currently at university and will be for another couple of years, so I am the only one with a working income at this time, which is around $160,000 gross. Although this could potentially drop to around $95,000 in about 4 years time when i chose to return home to work, (currently working a fly in fly out job on a set roster, but obviously won't be wanting to do this once the decision is made to have children).
Now we are looking to get into purchasing quite a few investment properties, and although we have been doing our research for the last 12 months, we don't seem to be getting any closer to doing so, it seems that when we make a decision on what and where to buy, our minds are suddenly changed after listening to somebody.
At latest, we were looking at purchasing a 2 bedroom early 80s style unit in Box hill Melbourne for around the $400,000 mark, its on a block of 6 units, but is not joined to any of them. They are currently renting out for $390 p/w but could possibly go up after some little renovations. My plan was to take a IO loan out for either the full amount including deposit, with an offset account. Or put down a 10% deposit from my savings and borrow the rest on a IO loan with an offset account. Then wait a couple of months and repeat the process, or possibly purchase something rural with a high rental yield but cheap purchase price (low capital growth).
Now I was almost ready to go get my finance set up and approved and make a formal offer, when i took some advice from a family member to go and speak with an accountant they had been using for years who seemed very well experienced in the investment property scene (they own quiet a few IPs) who was going to put me onto a mortage broker, but after speaking with her for some time, has suggested that i may want to look into purchasing OTP so i can claim the tax benefits on my income because i am being taxed a lot of money, I was suggested something OTP around the eastern suburbs of Melbourne in a complex no larger than 35 apartments, at around the $490,000 mark for a 2 bedroom apartment. And after that settlement is complete, then look at purchasing another OTP property. This accountant seemed very knowledgable and very smart, and explained to me that he/she only ever buys from reputable developers who they have used many times and never had any issues as of yet, (been doing this for a few years now and currently have around 12 properties). I was also informed that the rental yield is at a guaranteed 5% for the first 12 months.
This has thrown me a curve ball and now i cannot decide whether or not my original plan sounds good to me anymore.
I would absolutely love to hear any of your experiences or opinions on what might be the correct plan for me to take, as right now i am once again feel like i am back at the start and need to start the long process of research again, this time on OTP instead of established.
Any and all advice would be greatly appreciated and i would just like to thank you for your time in advance.
Kind Regards, Carbie
Hi guys, I am just after some advice and opinions on my current situation.
I will give you all a brief understanding of my situation at present.
I own 1x 2 bedroom split level apartment in Port Melbourne, half a block off the beach, there are only 8 apartments in the building, which is 3 stories high with beach and city views currently worth around $720,000 Fully paid off. We are living in this apartment at the moment. But if rented, would fetch around $610 p/w.
I have around $100,000 in savings. With no repayments owing on any loans or car loans.
My partner is currently at university and will be for another couple of years, so I am the only one with a working income at this time, which is around $160,000 gross. Although this could potentially drop to around $95,000 in about 4 years time when i chose to return home to work, (currently working a fly in fly out job on a set roster, but obviously won't be wanting to do this once the decision is made to have children).
Now we are looking to get into purchasing quite a few investment properties, and although we have been doing our research for the last 12 months, we don't seem to be getting any closer to doing so, it seems that when we make a decision on what and where to buy, our minds are suddenly changed after listening to somebody.
At latest, we were looking at purchasing a 2 bedroom early 80s style unit in Box hill Melbourne for around the $400,000 mark, its on a block of 6 units, but is not joined to any of them. They are currently renting out for $390 p/w but could possibly go up after some little renovations. My plan was to take a IO loan out for either the full amount including deposit, with an offset account. Or put down a 10% deposit from my savings and borrow the rest on a IO loan with an offset account. Then wait a couple of months and repeat the process, or possibly purchase something rural with a high rental yield but cheap purchase price (low capital growth).
Now I was almost ready to go get my finance set up and approved and make a formal offer, when i took some advice from a family member to go and speak with an accountant they had been using for years who seemed very well experienced in the investment property scene (they own quiet a few IPs) who was going to put me onto a mortage broker, but after speaking with her for some time, has suggested that i may want to look into purchasing OTP so i can claim the tax benefits on my income because i am being taxed a lot of money, I was suggested something OTP around the eastern suburbs of Melbourne in a complex no larger than 35 apartments, at around the $490,000 mark for a 2 bedroom apartment. And after that settlement is complete, then look at purchasing another OTP property. This accountant seemed very knowledgable and very smart, and explained to me that he/she only ever buys from reputable developers who they have used many times and never had any issues as of yet, (been doing this for a few years now and currently have around 12 properties). I was also informed that the rental yield is at a guaranteed 5% for the first 12 months.
This has thrown me a curve ball and now i cannot decide whether or not my original plan sounds good to me anymore.
I would absolutely love to hear any of your experiences or opinions on what might be the correct plan for me to take, as right now i am once again feel like i am back at the start and need to start the long process of research again, this time on OTP instead of established.
Any and all advice would be greatly appreciated and i would just like to thank you for your time in advance.
Kind Regards, Carbie
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