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As you are probably aware there are so many ways to get started
when investing in property, so I would highly recommend you talk
to a Financial Specialists that actually specializes in property
all the time.
Because Banking criteria's
can change almost everyday so this is why you need to speak to
someone that is up to speed with it all, if you would like me to
refer you to a few financial specialists please email me (support@npis.com.au).
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Important point to understand is that your paying for the
mortgage so make sure you select the best structure and loan
facility to suit your lifestyle and cashflow.
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Due to so many changes in the lending system I will keep to the
general lending rule.
Firstly- the bank will need a minimum 10% deposit, then you need to pay mortgage insurance, stamp duty and
loan costs. Now depending on which state you purchase in, the stamp
duties can vary immensely. Eg Melbourne has the has the highest stamp
duty charges where QLD has one of the lowest stamp duty charges.
It also depends if the property you are wanting to purchase, it it is off the plan or an existing
property.
Just remember, if it is off the plan you only pay stamp duty
on the land not on the total amount of the finished property.
EG- $300,000 Purchase Price of the Investment
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10% Deposit
Stamp Duty on the land value $180,000 (QLD)
Loan Costs approx
Conveyancer Approx
Mortgage Insurance
Total needed to start |
- $30,000
- $ 4,950
- $ 2,000
- $ 1,500
- $ 3,600
- $42,050
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I have a lender that can do
100% lending on a
Investment, no money down,
email me if you would like his contact details.
Many developers will either ask for a Cash, Bank Guarantee or a
Deposit Bond which is getting used less and less these days.
Please Note- If you're building a new property and there will be
progressive construction costs
make sure you borrow the extra money for the interest payments
along the way.
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Many
Accountants will tell you that you cannot claim the interest
payments when building an Investment Property.
They are so wrong because the Tax Rule States - As long as the
property is being built for Investment purposes then the
interest is claimable against your taxable income, but not the
charges like rates etc, only the interest.
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The most easiest way to purchase an Investment Property is by
using the equity from your own home
or you can also use some-one else's home as the security and make an
agreement or partnership. This way you will save yourself Mortgage
Insurance and most importantly you wont need to put any cash down
for a deposit.
I know many people do not like using the home as security to
purchase an investment property, if your concerned about that
there is a way that you still can separate the home to investment
property.
The Answer......All
you do is take out a loan against the home for the deposit and to
cover costs, then you go to another bank to finance the
investment. Therefore you will have 2 investment loans, 1 with the
new bank and 1 with your own bank, both will be fully claimable
against your income tax as they were both set up for investment
purposes.
Or if you would like to separate the Investment property from the
property used for security all you do is wait
a few years for the investment to have increased in value and then have the bank do a valuation
on the Investment Property to prove
there is enough equity so it can stand on its own. Remember the banks
need 20% security and they will allow it to be alone, the banks
should release the property used for security.
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