Hi folks.
My wife and I are at a crossroads. Do we use a soon to arrive financial gain to get a house of our own, or do we start to invest in properties and build up a decent portfolio, and look at getting a really decent house down the track (at this point in time we’d only afford a house that would barely meet our family needs).
A quick snapshot of us…
2 parents with 3 kids.
Potential deposit available to us = $60-$80k (conservatively)
Currently on a single modest income.From recent chats with mortgage brokers, we could probably afford a loan of $250,000, but that’s based on getting a primary residence and no longer paying rent ourselves.
Our dream has always been to own a range of investment properties, and are considering that it might be better to act now, rather than hope we can do it in later years.
But we have no idea where to start. What sort of properties should we be looking into? What are some good strategies to get 2nd, 3rd, etc properties?
Cheers,
Dale.Dale
Interest on your PPOR will be non tax deductible so if you are happy with the home you are currently renting then probably better off to consider expanding your IP portfolio rather than buy a PPOR which wouldnt serve your current purposes.
Depending on the purchase price you are considering with $60-80K you could probably afford a couple of IP's as well as retain some of the funds to go towards your PPOR deposit down the track.
Richard Taylor | Australia's leading private lender
Dale
Interest on your PPOR will be non tax deductible so if you are happy with the home you are currently renting then probably better off to consider expanding your IP portfolio rather than buy a PPOR which wouldnt serve your current purposes.
Depending on the purchase price you are considering with $60-80K you could probably afford a couple of IP's as well as retain some of the funds to go towards your PPOR deposit down the track.
Richard Taylor | Australia's leading private lender
Dale,
Perhaps look at finding an IP that is cash flow positive (you'll see from other posts that this is possible) as the rent you collect will become part of the servicing equation. Correct me if I'm on the wrong track, but I think Richard is suggesting splitting the deposit monies over two IPs, maybe $35,000 as your equity contribution in each case. This seems like a good strategy, and again would benefit from cash flow positive property.
Hope you find a way.
Where are you located?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
JacM wrote:Where are you located?We’re in Melbourne.
Thanks so far for the ideas guys. That’s something I’ll have to sort out as well, the taxation and accountancy side of things. I’m a complete and utter newbie. Things are definitely more involved than a simple loan and rent equation it would appear.
Splitting the deposit between a couple of cheaper properties sounds interesting.
Dale,
Sometimes life is about making money and sometimes it is about just living for and with your family.
Although investment properties on paper my slightly outweigh purchasing your own property. You have a family that must come into consideration. I like to look at both sides of any decision – the PPOR (your own house -castle) side of the equation looks like this:
1. No capital gains tax.
2. A real family home to grow and nurture memories.
3. Peace of mind – you cannot be evicted. (stability with schools, friends etc)
4. You are able to make it your castle – gardens, lawns and all the other good reno's.
5. No tenants and pressure of an investment.
6. Your rent reduces over time (i.e. your loan does not go up)
7. There is no place like home…………..Look, we all love to make money, this can be made in your own home.
You can literally create money in your own back yard then leverage of this down the track to purchase investment properties where required.
Number 8: Very sage and sensible advice. Thank you. I have owned a PPOR before, as well as renting before and after the PPOR, so I’m aware of the pros and cons of both sides. Well worth considering though.
Has anyone had any experience with http://www.cashflowcapital.com.au ? Some of the properties look too good to be true (I’m usually cautious by nature).
They certainly have some good properties and I have financed a few of their acqusitions for other clients.
All in all no real issues but like anything do your own due diligence.
Richard Taylor | Australia's leading private lender
Here are a few areas to consider:
Melton
Wyndham Vale
Tarneit
Geelong
LavertonJacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
JacM wrote:Here are a few areas to consider:
Melton
Wyndham Vale
Tarneit
Geelong
LavertonWhat's happening at the moment with these areas? What makes them attractive?
They lie on the growth corridor.
I own property in Hoppers Crossing which I bought in late 1999, when there was a lot of expansion going on in the area. It is now the year 2010, so that's 11 years I guess. The property has almost trippled in value.
The buy-in price in these areas is affordable, and it's also affordable for tenants to reside there.
Melton just became the new home to harness racing.
Laverton is still very dodgy looking and is right next door to a lovely looking new suburb. There will be spillover.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
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