Hi all,
My family is growing and as such, we are looking to buy a bigger house here in Adelaide.
To do this, we have two options:
1: Sell our current house to hopefully get enough money to help buy another one. Or,
2: Keep our current house as an investment property even though it may mean we have to really tighten our belts for a couple of years.
Since this is our first house, we are unsure of what to do and what questions to ask.
Q's we have thought of are seemingly standard ones,
How much can we borrow, what are the costs/fees/charges/repayments. Can we change our current loan to an investment loan, do we need a bridging loan?
We were looking to possibly buy an investment house in the new year so if we can somehow make that happen while doing this, I think it would be a good start for us as this fits into the time frame of needing a larger house.
Any advice you can give us would be great.
Thanks for your time
HC
Hi HC
Welcome to the forum and I hope you enjoy your time with us.
Whether you can afford to purchase another property and retain this as an investment will be based on serviceability and also available equity and without a lot of this information it is difficult for me to comment accurately.
The cost etc will again depend on the way forward although purchasing will involve stamp duty and selling will involve agency fees etc. Whether you can arrange a bridging loan will depend again on equity etc.
Sorry to appear non commital but as i say would need actual numbers to let you know your available options.
Then whether you decide to sell or retain the property will be upto you.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi HC77,
With regard to Question 2. "Keep our current house as an investment property", I would suggest asking yourself some of the usual questions when looking at purchasing an investment property.
1. Is it in an area where there are less than 3% vacancies in rentals? (Check with a property manager in the area).
2. Is it in an area where around 30% of dwellings are rentals? You can look up demographics for your suburb to get this figure. This figure together with no 1. also indicates what the demand would be (although vacancies percentage a better indicator).
2. Is it in the right price bracket for rentals in that area (an indication of the rental demand for your property).
3. Is it in a good location that is accessible to public transport, shops, schools, etc?
For what it is worth, as much as I love my current PPOR, I wouldn't keep it as an investment property due to its proximity to public transport (I drive everywhere) and it would be above the price bracket of a standard rental, therefore would be in jeopardy of it being vacant for too long.
I would get a property in a better location and lower price bracket as my IP. Also then, because it's in a lower price bracket, perhaps I can then afford a 2nd IP sooner than I otherwise would have.
Good luck!
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