Reply To: Advice on my investment decision (3rd property)

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Hello, PeteW,

I’d like to join AgentPam in extending a welcome to you and I would like to introduce myself. I am a loan manager for a major bank (I’m sure they won’t accept this post if I name it). I’m very interested in your post because you already have two rental properties and you are looking to buy a third or maybe two more.

Your situation is very notable for a loan manager like myself. I’m assuming that you have a mortgage on your own home and you paid cash for the two units you bought to rent out. You are in a very good position, which you might not realise. With the proper advice you can ramp up to become a very serious professional property investor. I would certainly like to help you with that and you can PM me so we can work on this.

Lending institutions don’t like people using residential mortgages for investment properties. A typical mortgage that gets advertised on TV is only for people who want to live in the property that they get the mortgage on. Mortgage availability goes on your income and the rental income doesn’t count until you have three properties. Once you reach that point, you need to divide your property activities. The mortgage you have on the unit you live in goes on the income from your job. The rental income from your other properties counts as a standalone income and then you go for buy-to-let mortgages, admitting that you will be renting out the property.

Now you have a great chance here because most lenders will count your next property as though you already own it. So you can get buy-to let mortgages on your new property and also release equity on the existing two. It’s just a matter of presenting an investment plan with the expected rent from your new property and the proven rent from your current two. Buy four more all with a mortgage using the equity you get out of your existing rent as your deposit.