Forum Replies Created
Hi Snowflake,
Well it looks as though you are running a very tight budget and will be even tighter as the interest rates are expected to rise in Feb 08. East link will most definitely increase value once it opens up and I would suggest to hold on to it by all means. Are you able to refinance the IP loan to reduce repayments (positively geared?), is it P&I or interest only loan? Before thinking of selling IP, decide which property will perform better in terms of growth.
Action plan:
Create a budget and see how you would cope with another rate rise. (If you'll be overly stretched, would you consider renting out both places? and rent somewhere smaller to increase cashflow for 12 months). Are your parents needing the money back ASAP? If so, include fortnightly payments into the budget.
Depending on how eager you are to have a family, can you delay the plans?
As you husband has been studying 5 years in his profession, i'm sure that his salary will pick up considerably with experience, however in the meantime, get part time jobs to hold both properties.
1 or 2 vehicles? can you downgrade?. V8 – 6cyl – 4cyl? Mountain bike even : )
If you only have 194k left on the IP returning $295 per week, ask your bank if you can change that to a line of credit (costs invovled SEEK PROFESSIONAL ADVICE), put the 25k in your savings which will reduce the interest (paying interest on 169k)
Hopefully you may get something out of this, but I know that success comes with hard work and sacrifice, most importantly work as a team with your husband and challenges dont seem so gloomy. Overall, I think you are in a great position with what you have and where you would like to go. Good luck & believe in yourselves.
Cheers
CIS
Hi Del,
Great idea to purchase, renovate and resell asap. As there are so many factors to take into account when purchasing, the most important thing in your case is the cost of all the renovations on top of your purchase price and other outgoings. If you can purchase below the median range in the area, then great. I have known friends who have over capitalised and now they are holding on to their properties until it appreciates a little more. I'd advise to place most of the effort in the bathroom and kitchen and carpet can be a more cost effective way than floor boards. If you know of some tradies who can do the work for you @ mates rates, that helps heaps, otherwise, purchase them yourself and get them to do it. Hopefully im of some help, as I was in a similar situation earlier this year, but I have decided to keep my property and not sell. I had budgeted 25k for renos and after research and quote comparing, it was completed approx 12k.
Cheers.
CIS
