When can I borrow again

[EstatePreneur]

With the interest rate on the rise, I'm not sure if it's the right time to buy my 1st IP. But I sure do know it's better to buy sooner than later.

I was wondering if the bank would allow me to borrow money for my 1st IP purchase.

My current situation:
PPOR bought in Aug 2007 a few months ago for $370,000.
$150,000 already paid, and borrowed the rest $220,000 from Westpac.
I'm on a 7.69% fixed loan, monthly loan repayment is $1575.

I just started full time job 3 months ago with net salary roughly $34,000 per annum, and another $14,000 (net income) from my other part time job, so that makes it $48,000 net income/annum.

Do you think the bank will lend me more money to buy my 1st IP? If not, when would they do?
I'm thinking that they'll want to look at my annual income tax return which won't be available until mid next year, before they allow me to borrow more.

By the way, for my 1st IP, I think I'll be looking at houses in the $300,000 - $400,000 range.

 

[EstatePreneur]

Also when it comes to minimising tax payment, I've read that IP investment is one of the best way to go. Is this true? I have very minimal knowledge on this one, so could anyone shed some light on this pls?

 

[alexlee]

Re whether you can buy again (that is, whether the bank will lend you money), that's why you need mortgage brokers. Talk to a good one.

Also when it comes to minimising tax payment, I've read that IP investment is one of the best way to go. Is this true? I have very minimal knowledge on this one, so could anyone shed some light on this pls?

Tax deductions should NOT be the only or main reason why you invest. The return must be there and high enough to justify the losses in the first place. However, in general property does have more tax deductions than, say, shares, mainly because of depreciation.

However, you should not invest in property because it reduces your tax. Invest in property because you believe it gives good returns.
Alex

 

[Peter_Tersteeg]

Based on the numbers you've provided, you realistically wouldn't be able to afford to purchase an investment property in the price range you've mentioned, unless you could find a positively geared property.

To purchase a property, you really need to be looking below $180k and even then it might be a struggle depending on the actual rental return you receive.

Do you have a partner? These calculations were done just using your income and an additional person would change the figures dramatically.

Keep in mind that when claiming tax deductions, the deduction you receive is determine by your income. Below $50,000 you don't actually pay a lot of tax, so the deductions wouldn't be that great either.