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  • Profile photo of arope99arope99
    Participant
    @arope99
    Join Date: 2012
    Post Count: 5
    June 7, 2012 - 7:57 am

    I guess I should have asked in a more specific way.

    If we are going to buy a property, we would buy in the eastern or north eastern suburbs close to Adelaide city (Norwood, Maylands, Payneham, etc). Reasons are

    – easy for me to travel to/from work
    – close to city and shops
    – rental vacancies in those areas seems to be low

    Is it a good time to buy unit or small townhouse in those areas at this time? Hope people living and investing in Adelaide could help.

    I’m just trying to make sure that my final decision would be the best, with probably some backup plans down the years.

    Thanks everyone.

    Profile photo of arope99arope99
    Participant
    @arope99
    Join Date: 2012
    Post Count: 5
    June 7, 2012 - 4:15 am

    We’ve just done a spreadsheet comparing these 2 options.

    OPTION 1

    Buy our 1st home for $300,000 (with 10% deposit, interest only with offset account, and put $2000 in the offset account each month). Stay there for 5 years, then rent it out. Take the money out of the offset account and use that as deposit to purchase a new bigger home.

    After 5 years,
    Cash in offset account = $120,000
    Home equity = $30,000 (assume no growth, just difference between home value and principal)
    TOTAL = $150,000

    OPTION 2

    Continue savings in both my wife and my First Home Saver Account (total of $11000 a year 17% pa interest) for the next 5 year. Then save about $1000 a month on other high interest savings account (min 5% pa, under my wife’s name – no tax).

    After 5 years
    TOTAL = $195,000

    This is not taking into account any salary increase, etc.

    There’s about $45,000 if we continue to save in 5 years. Do you think property valued at $300,000 now would increase more than $45,000 in 5 years time?

    Is it still worth purchasing a property now?

    Thanks for all the opinions.

    Cheers.

    Profile photo of arope99arope99
    Participant
    @arope99
    Join Date: 2012
    Post Count: 5
    June 2, 2012 - 4:36 am

    Thanks a lot for your opinions. We really appreciate it. It seems like buying a PPOR now with interest only + offset account seems to be the best way. We’ll start budgeting now and looking at properties/finance options.

    Any suggestion of the best home loan product with interest only + offset account. I’ve contacted a mortgage broker and he’s looking into it.

    Thanks.

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