Hi
I have an interesting problem. I currently live overseas (aussie) and have been investing in NZ, only started last year and have relatively slow progress in NZ (4 props). I may be coming home at year end but have no where to live. I have a choice to either save up for the sydney deposit and be rewarded with 500k mortgage, or say stuff it keep investing in nz while the +CF properties stick around (but for how long?) and pay 500+pw rent living in syd
BR
DKFChuckes
It would really depend on your goals. If you want to keep growing your portfolio and you like investing in NZ, then it kinda makes sense to keep doing what you’re doing for the mo. Slow progress is better than none!
Unless you feel you need to buy your own home, then put the money you would be saving for your house towards more IPs. [biggrin]
feral
Do both , one without the other wont get you any where long term.
If you buy investment property for ten years lower market for +cash flow then buy the time you sell to buy a home the profit will only pay for the increase in the expencive house. bottom line little to no gain.
If you buy to live in and you never invest because you think to much of your money is tied up, in ten years you will still have a large loan and only one property , sure it will be worth more but that is it.Bottom line little to no gain.
Be smart buy your dream home or = in price to. If you cant afford to live in it , rent it out , maybe look for a house with a fully self contained unit ,so you live in that or the house , rent the other part out so you free up money to invest.
Example a frind of mine always want a house on the beach the only way she could afford it was she bought a house that was a little larger than she wanted , she done a couple of mods e.g put a kitchen in put up a couple of walls to seperate part of the house then rented out a couple of rooms to students but it was copletly seperate from her living quaters . 7 years later when she was earning beter money paid a large part of the loan off, she reclaimed the rest of the house now she has her dream house that was partly paid for by other people. She would not have been able to do this without thinking a bit different.There are so many ways , find one that suits you.
but as I said before do both.Cheers Rick [drummer]
OK last week down in sydney I was in front of a lawyer and his fiance. They were renting a unit for $460/wk, to buy the house would be $800k, this would mean a 1200/wk mortgage.
I would prefer to rent and live where I wanted rather than struggle and live where I could only afford. Ok end result, happy you due to location, happy you as you have $740/wk in your pocket rather than a “bad debt” with no tax deductions, and finally happy you because you have extra funds to service another 4 IP’s straight away. Get as many as you can financially stand, struggle with rates and servicing for a year, sell off the worst performers and then review and move forward. 4 years of good property investing now has us in our fream home in Coffs and its all good.
Good Luck with your decision but i know where I’d be.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!DD it isn’t that clear cut.
Should you believe there is strong potential in one area then perhaps it would be attractive to buy a PPOR and enjoy the CGT exemption when you makea 50% gain in a couple of years?
Just an example to get people thinking.
Simon Macks
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Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
It’s a position I want to be in a couple of years. So many Australians wouldn’t even dream of renting as they see this as throwing money down the drain, or paying of someone else’s mortgage. I see this a little different now. If you rent a nice place in Sydney you don’t have to worry about paying rates, stamp duty etc. Keep investing in NZ for now. I am sure there will be a drop in the Sydney market in the not too distant future and you can buy in cheap. However, if you find a cheapish place which you can add value to you might also want to consider buying it.
My online investing diary: http://retireyoungandwealthy.blogspot.com/
Well we took 13 years to pay off our mortgage in Sydney. It has taken us 4 years to now have a gross worth of over $4mil. All the tax and depreciation benifits, staying put in Sydneys west for longer than we needed to, and then doing the quantum leap into a $million dollar street in Coffs, I think its pretty clear.
Rental of a nice place is considerably cheaper than owning in the same area, and mortgage hunter it is that clear. With a few runs on the board now, I would never start with a big mortgage. I and my wife would rent until we could just sell a few and have a big enough deposit to make it feasable to buy where ever we wanted and not be crippled by a big non deductable debt.
If the NZ props are putting cash in the mix, repeat the process like a cookie cutter until it bleeds. Watch the NZ/Aus tax situation though. It can be a little tricky. Careful with reno costs in NZ too as even standard tiles are 3 times the price here.
Bottom line though is that it is your final decision and not anyone elses. Choose what is best for you, and be damned to those that frown at whatever you decide. It is your life, enjoy the ride.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!
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