Deposit Strategy 3: Self Managed Super Fund
The direct savings method requires plenty of consistency and perseverance, but it can be done. $3,000 per month would see you reach your target in 1 years 8 months. Saving $2,000 per month would get you there in 2 years 5 months. (The problem is, the required deposit to purchase the same property will have gone up by the time you’re finished). If you save $1,000 per month at 3% p.a., it will take 4 years and 8 months to save $60,000. Then there are “boring” old direct savings. That’s a handy way to raise the necessary deposit… but what if you don’t already own property? Deposit Strategy 2: Direct Savings Let’s say you buy your home for $500,000, with a mortgage of $400,000.ĥ years later, your home is valued at $600,000, and the mortgage is only $350,000. The most common deposit strategy for new investors is to use equity in your home. Here are the 5 most commons ways to save your deposit: Deposit Strategy 1: Use Existing Home Equity That means on a $400,000 investment property, you’ll need a deposit of at least $60,000 (10% + 5%). There will also be state government stamp duty and other costs to pay, which will vary depending on the state where you’re purchasing.īut let’s use 5% as a reasonable estimate of these costs. This involves additional fees, which need to be factored in to your overall plan. In most circumstances, lenders require (at least) a 10% deposit on the purchase price.Īt this level of deposit, Lenders Mortgage Insurance is required. So here is some of our advice for first-time investors: Readying Your Deposit Maybe if they had the right information up front, they would have been able to start sooner. They then waste time and energy getting their ducks in a row to invest. Many would-be investors dream of getting on the investment property ladder, only to find that they’re not in the financial position to invest.
#INVESTING FINANCES HOW TO#
If you’re a first-time property investor, then it’s wise to consider how to prepare your finances to invest in property. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.įusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.Property investment has proven to be one of the most successful vehicles for creating wealth in Australia. It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes.
#INVESTING FINANCES PROFESSIONAL#
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