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Have you thought about selling the property with your brother? Or selling your half to your brother?
You could place money into your super fund and ensure that it is a diversified portfolio including shares. I would consider hedging my bets in super with money invested in property, shares (australian and overseas), cash (international and australian) among other things. This would be a lower risk way to invest in shares and less likely to result in huge losses.
You could also place money in a managed fund but in an economic shock you may lose your money (higher risk).
I would recommend reading about the share market at your local library and/ or buying some books so you understand the risk and any opportunity. Best to spend money on things you understand (property or shares).
Hi Heather,
Why not use the 100k for retirement? You have your house paid off. If you take out a mortgage, which you will inevitably have to, your home could be lost. Seek independent paid advice from a financial advisor who can advise on the risks and benefits of this. Remember a house that can not be rented out, or sold, is worth little and is always a possibility. I know of a recently renovated property in prime real estate in a beach suburb of Hobart that is currently for sale and rent…for weeks.I should also add that there may be legal issues related to property renovating and investing. Seek paid independant legal and financial advice.
Negative gearing means you are losing money. Putting money into anything with the plan to lose money is not an investment, it is always a planned loss and not something that makes sense to me. With 100k in the bank and a job then I would think about getting a small mortgage and paying off a house. Spend your time doing up the house and adding value, then sell at some point in the future, or keep yourself a better home.
At the moment most renovator properties are selling for the same or more than brand new property. Unless an old property sells for less than a new property, I struggle to see the benefit in renovating or purchasing an existing property.
However, I would be extremely cautious buying any housing at the moment (have a plan B if you lose your job). You may be better saving for a while longer, watching the market, and buying something with cash.Additionally Chinese credit flowing out of China has been reduced with further reductions likely. An estimated quarter to third (depending on news source) of Chinese loans are fraudulent (the house or goods it is based on does not exist). With banks restricting mortgages to overseas buyers the buyer pool is reduced further. A restricted program of citizenship (from one year to four years) may also have an impact.
Banks are under pressure to lend responsibly by raising capital (savings) and reducing their loan book to ten percent of all loans to be interest only. Depending on the news source 30 to 60 percent of banks loan books have been interest only. Expect increases in rates and corresponding defaults as banks work to meet APRA requirements. A reduction in cheap credit should bring down prices in most markets.
The aging population myth will also impact as deceased estate sales are likely to grow in the next five to ten years and slam the market into over supply in my opinion. A reduction in family tax benefit and the single parents benefit should see rents go south too. Do your own research, this is my opinion based on my research.I would not want a sewer pipe on my land if the owner of the pipe says that I am liable for fixing issues assuming this takes sewerage from other properties. Too risky for my blood. If you do pursue this property then the price paid should reflect the risk.
You figures stack up to a loss. I would stay in my house, pay it off, save some money in super and cash and look to retire and save up for some trips/ time off in between. It’s fine to put your home on the line when you are well, and employed. What happens if you lose your job, or find yourself disabled, or unwell? What happens if you can not find tenants? Those questions are essential to planning. If you must invest in property then buy with cash after you home is paid off. Personally, I would be diversifying my money by putting it in 1) my principal place of residence; 2) super with a diversified portfolio 3) further education at TAFE 4) cash in the bank 5) holidays
