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Thanks for your advice Corey, will do :)!
Thanks Alistair, I appreciate your advice.
DanaThanks Alistair, I too had the same plan of buying our next property in Sydney. However prices are out of my reach now, and given the unstable economy I’m somewhat nervous of having a bit mortgage when jobs aren’t the most secure. I see Newcastle as an attractive way to be able to buy land and I also much prefer where Newcastle is in the property cycle, with house prices on the up but still affordable. I had thought that it may be best to buy a house in Newcastle, pay it off for the next year, and hold out on Sydney for the time being while I watch what the Sydney market is doing. Talk of a bubble has me concerned/interested and I think a lot of people are over-leveraged. As prices are only modestly expected to increase in the next year or two anyway, I had thought that by the time I’m ready to buy, I’ll have equity in the Newcastle property to help me buy in Sydney. Is this misguided?
Hi Alistair,
That’s the thing, we’re no longer entirely sure. My family is in Sydney and so is my job, however my partner has family in Newcastle, an investment property there, and he’s a coal miner so they are both viable options. If I could choose I would like a unit in Sydney in the inner west (Ashfield, Croydon area), and a house in Newcastle (Adamstown, Hamilton) since the house prices are so reasonable there and I just want the option of having a house one day in case of children etc. However are houses a sound investment or are units always preferred?And would you recommend they be negatively or positively geared?
Hi TheNewGuy,
The $80k is in addition to the $200k. It is the last portion of the loan on the unit that is ready to be paid off, however we’ve kept it in offset in case we choose to buy another. The unit is worth approx $250k.
The $200k in savings is just sitting in an account doing squat. I’ve stopped adding to it and started buying shares in a few companies for diversity, however I prefer bricks and mortar.Thanks for the words of encouragement Corey, we feel quite good about our situation however it is easy to lose perspective and become demoralized in the Sydney market. I’ll definitely look into what you suggest.
His Aunty is 50 years of age so hopefully that won’t be a consideration for us or her for quite some time! We are currently in the process of renting the Newcastle property out (after we have our holidays there in Jan). The unit is essentially paid of with the money sitting in the offset account to pay it out in full. We were thinking of taking that amount and adding it to the $200,000 deposit I have to purchase the next property and keep the mortgage down. However if we wish to rent out the proposed Sydney unit as an IP and keep renting are we better to keep the funds in the Newcastle unit, the new Sydney unit, or do something else with the money? I’m trying to figure out the best strategy for us.
Thanks for the great points guys. Certainly a lot to mull over, and as you said there is no rush so I will engage a financial advisor who has a specialist interest in real estate and go from there. Thanks again!
Hi Benny,
Thank you for the words of encouragement, as we were starting to feel quite demoralized with the Sydney housing market, so it’s good to hear we have some options! You’re right about the advice, we do need to find a financial planner and I’ll research one that has an interest in property and make an appointment.
