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Second property?

Discussion in 'Real Estate' started by Mark88, 9th Oct, 2012.

  1. Mark88

    Mark88 Active Member

    Joined:
    7th Feb, 2010
    Posts:
    31
    Location:
    Sydney, NSW
    Hi,
    I just wanted some advice as what you would do next if you were me. I am 24, salary of 64K and still living at home so not paying rent or mortgage for PPOR.
    1st investment property bought last November, lived in for 6 months to claim FHOG and then rented this June – house in Blacktown bought for $357 500 and rented for $410 a week through an agent.
    My loan is $285 000 and currently have 55K in offset account on an IO loan.
    Assuming there is no money in offset account, expenses for this property are:
    Interest at 6% = 17100
    Building insurance = 780
    Landlord insurance = 345
    Council rates = 1170
    Water rates = 1002.8
    Sundries = 66
    Management fees = 1641.64
    TOTAL EXPENSES = 22 105.44
    INCOME ($410 per week for 52 weeks)= 21 320
    Net position = $785 loss per year excluding unforseen repairs etc

    So since I have 55K sitting in an offset account, I am thinking of buying another house around the Blacktown area and taking out a 90% loan. Good idea or no?
    My main concern is if I do that, then I will have minimal savings in cash, so what happens if I want to buy a PPOR in a few years??
    What would others do in my financial situation?
    Thanks in advance
     
  2. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    You may be able to use the equity in blacktown to purchase the next one, particularly if it has gone up in value.

    Also you haven't factored in depreciation and other non cash deductions into your calcs and not included tax saved so you property would probably be cashflow positive if you do - which is very good work,
     
  3. julya

    julya New Member

    Joined:
    24th Jul, 2012
    Posts:
    4
    Location:
    South East Queensland
    thax

    thax for sharing wonderful information.
    this will help us in Residential Properties