Hello,
I have recently arrived in Sydney and as part of my salary negotiation I am on subsidised rent for 12 months until Aug 04. I have 5 unencumbered investment properties (Bris, Gold Coast and 1 in Canberra) in my portfolio and am aged 52. I am unsure as to whether I should purchase positively geared property using my existing property as colleatoral or bite the bullet and purchase a principal property here in Sydney to live in as I eventually will retire here. Basically, what I am asking is should I keep renting or buy more property and purchase later here in Sydney.Thanks for your help
Bob
Hi Spider
And Welcome to the forum, its honestly up to you, if it was me, why dont you do both,
and if it dont work out…. what have you got to lose, you can always sell your PPOR and cash in on any profits that are made or incured.
Or you can continue purchasing Investment Properties and cash in on them
Or use them as a product of financial management in helping you get a PPOR in Sydney or provide a greater passive income.
In respect both ways, will work well.
cheers
s.i.sS.I.S.
Thanks for your reply. I guess it’s a matter of expedience for me. If I continue to rent here in Sydney and buy +Ve property out of the capital cities, will it be more advantageous than purchasing a principal residence and renting it out considering the rents are low here in Sydney and accepting that we will be in for a further interest rise in Feb. I guess I will be better off just investing +Ve property as the market here could flatten or drop. The scary part is the real estate agents look you in the eye when they ask $1M for a “renovator’s delight”.The Sydney market is absolutely crazy! [xx(]
Matt
“If you do what you have always done, you will get what you have always had.”
“Isn’t it time for a change?”
Matt,
Thanks but what I did was a long time coming and I made just about all the mistakes one can in investing. At 52 I am trying not to make too many more.
Thanks agnSpider
Only through experience you get better…
cheers
s.i.s
Only through experience you get better…
Matt“If you do what you have always done, you will get what you have always had.”
“Isn’t it time for a change?”
Hi there
If you are in a postion to avail yourself of a rental property arrangement that is relatively low – subsidised until Oct 04 I see this as a bonus.
Particularly if the purchasing market is not an escalating one…therefore you have ample time to as you say look at the market – it may well “flatten or drop”.
From what I understand (and Im a newbie) the capital outlay in Sydney is Huge!!! and I would understandably be nervous about filtering my hard earnt dollars into a purchase that could now be eroded in the market……….and if only I waited !!!
I assume your Employ contract is endorsed for rental subsidy to the like of not owning a “habitable” dwelling in which you are to reside in ?? or do they assist with purchasing as well ??Regards
Hi Spider..
What’s your position after the initial 12 months is up ?
If you eventually look to retire in Sydney, then why ‘not’ use the time available ( Aug 04) to find something that you like, if the property markets in Sydney are experiencing a downturn/correction as we read, then you must be in a better position to negotiate a purchase.
As S.I.S says why not do both.. purchase your CGT free PPOR and utilise the equity in your rentals and ‘hopefully’ your PPOR to fund + Geared deals, as you say, you will retire here… if so, then think about the why’s, where’s and when’s regarding your eventual retirement..’plan now’.
My view only.. of course[
]REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
Hi there
If you are in a postion to avail yourself of a rental property arrangement that is relatively low – subsidised until Oct 04 I see this as a bonus.
Particularly if the purchasing market is not an escalating one…therefore you have ample time to as you say look at the market – it may well “flatten or drop”.
From what I understand (and Im a newbie) the capital outlay in Sydney is Huge!!! and I would understandably be nervous about filtering my hard earnt dollars into a purchase that could now be eroded in the market……….and if only I waited !!!
I assume your Employ contract is endorsed for rental subsidy to the like of not owning a “habitable” dwelling in which you are to reside in ?? or do they assist with purchasing as well ??Regards
Quote:jancrows,Thanks for your reply, yes the subsidised rent only lasts while I don’t own property here in Sydney, in the back of my mind I’m considering purchasing a residence here prior to June 30, shift a tenant in and paying the mortgage 12 months in advance to get the tax advantages, as I need them with some unencumbered properties. Luckily the agreement with my company is that they will pay the stamp duty on the purchase, however, the cycle had to start on the understanding I sold my house in Canberra, and as you can imagine stamp duty is significant here in good old “steak and kidney”. Thanks for your advice
Spider
spider, why would you want to retire to Sydney!?![
]Canberra is much much better!![
]A suggestion:
Find an area you like in Sydney. Rents are much cheaper than buying. 3-5% yields. Find a rental you like, and ask to sign a 5 year lease (or pick a number). Get some clause agreed to by the landlord that at any time, with 60-90 days notice, you can move out. If you change jobs, retire, leave Sydney etc. Work one out that may cause you to want to move – ie retirement.
Landlord is happy – no vacancies. You are happy, long term (cheap) rental that you can leave with a couple of months notice. Then buy some more +ve cashflow ips. When you do retire, stagger some sales of your other properties (to save CGT) and purchase your ‘retirement’ PPOR.
Cheers
Mel[Redwing,
Thanks. After the 12 months is up I’ll just keep renting I guess. As you are aware the rental return here in Sydney is very low, some investors obtaining 1 or 2 percent. The property I am renting here is valued at $600k and I pay $380 per week (minus subsidy), not a good return. I guess it comes back to the original question, rent here for 5 years or so or buy +ve rental properties and then in 5 years capitalise on the profits and then buy something here in Sydney to “retire” in, maybe with a view of Coogee Beach.
Spider
[Mel,
Mate I think you are right. I just needed some lateral thought. Stay in rental accommodation and purchase as many +ve properties as I can. No stress, enjoy the journey. I can have it both ways, a good lifestyle now and later on.
Regarding Canberra, well….it was a good place for employment and my grown up children had good schools, but unfortunately I don’t have any polar bear blood in me. I just love Sydney.
Thanks for your help
Spider
]
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