Hello everyone,
I am looking somewhere around St Kilda/Elwood. At the moment, the cheapest rental that one can get around there is about ($175 >). After adding up the figures, renting at these prices will cost me about $1000 each month.
On the other hand, apartments are selling for about ($175,000 to $250,000) at the moment in these areas. So if I take a loan of $200,000 P+I at an interest of 10%, the repayments will come up to about $2000, where I'll be just getting by, meaning that a rate increase above 10% will put me into mortgage stress. However, the way I think about it is that the $2000, which will be my mortgage repayments, won't be dead money, since it will go into my equity. That said, does anyone know how much corporate fees are?
Let's suppose I've got about $2000 left after all my expenses. If I rent, $1000 will end up to be dead money, but on the other hand, I will have $1000 to invest elsewhere. That's if I know how to. If I buy an apartment, my only expenses would be the interest and body corporate fees, then the rest will go into equity. Also, later on, if I decide to, I could probably rent the apartment for a 2nd income, as apartments in these areas are rarely vacant.
I just can't seem to decide which way is better. Anyone out there to enlighten me? Your help will be greatly appreciated and go a long way. Thanks in advance.
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