The following are a summary of tips from a seminar by Real Estate seminar in Sydney
1. Pay off mortgage in a couple of years. How?
- Pay fortnightly or more frequent if lender allows
- Refinance with cheaper lender, use Offset accounts for salaries, do daily spending with credit card
- Buy positive cash flow properties
2. Plan to buy something not that expensive, say $350K. Look for suburb with 10% growth, 7% rental yield.
With multiple properties, portfolio may be up to $5.5m, with $1.1m equity and $75k cash flow.
3. Buy and hold properties, but also add value by the following:
- Buy at discount
- Renovate
- Rezone
- Subdivide
- Develop
4. Finance Structure - important to get this right.
- Avoid Cross Collateralisation
- Use Interest Only loan - NOTE this can allow you to pay principal as well.
- Borrow maximum - Don't avoid Mortgage Insurance 80% threshold. Pay the mortgage insurance and borrow more to buy more expensive property. This allow a higher LVR say 95% or above.
- Never have more than one property with the same lender, otherwise they can do anything they like with any properties.
1. Pay off mortgage in a couple of years. How?
- Pay fortnightly or more frequent if lender allows
- Refinance with cheaper lender, use Offset accounts for salaries, do daily spending with credit card
- Buy positive cash flow properties
2. Plan to buy something not that expensive, say $350K. Look for suburb with 10% growth, 7% rental yield.
With multiple properties, portfolio may be up to $5.5m, with $1.1m equity and $75k cash flow.
3. Buy and hold properties, but also add value by the following:
- Buy at discount
- Renovate
- Rezone
- Subdivide
- Develop
4. Finance Structure - important to get this right.
- Avoid Cross Collateralisation
- Use Interest Only loan - NOTE this can allow you to pay principal as well.
- Borrow maximum - Don't avoid Mortgage Insurance 80% threshold. Pay the mortgage insurance and borrow more to buy more expensive property. This allow a higher LVR say 95% or above.
- Never have more than one property with the same lender, otherwise they can do anything they like with any properties.
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