My fiancé and I are considering our options for where to live and where to invest.
I own an investment property, which I am in the midst of sub-dividing and building a townhouse on. The Bank has leant me $329,000 of which only $229,000 was used to acquire the original property (the extra $100,000 is for the townhouse construction and is sitting in an Offset Account). We estimate it’ll cost around $160,000 to construct the townhouse we want and prepare the land. I would need to borrow additional funds to do this and we would then live in the townhouse when we’re married and have the rental income from the original property coming in. I’d estimate we’d have a mortgage amount of a little less than $400,000 in this scenario.
Our alternative is to used the $100,000 I have yet to draw down as a deposit for another property. We don’t wish to spend more than $350,000 on another place, so after the deposit, that’d be another mortgage of $250,000 – in my fiance’s name. I would then sell the existing investment property (valued at around $230,000) and use the funds to construct a townhouse on the subdivided lot. We estimate that rental income would be around $320 + per week and the combined mortgages would be around $509,000 ($250,000 + ($160,000 + 99,000)).
We’re undecided on the best course of action as the townhouse is in a better location for work (closer to Melbourne CBD, train line etc) and buying a house for only $350,000 means an extra 20 minutes transit for me from where I currently live! For those familiar with Melbourne, our investment property is in Scoresby and we’re thinking of buying in Endeavour Hills/Narre Warren or Berwick.
My preference is the first option, as I’d rather live closer to work and have less debt in my first few years of marriage, but my fiancé thinks otherwise. Can anyone offer any suggestions or recommend a good property advisor in Melbourne?
Much appreciated.
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