Hi All,
I’m new to PI. I don’t know how much info you need so I’ll start from the top.
The wife and I have a unit, we got it when we got married, 3yrs ago. We were of the belief that we would by a new house when we were ready to start a family. That time is now. We don’t have high paying jobs; in fact we seem to be average. Our unit was valued at 220 6mths ago, we used the equity to purchase land and are now building. When we are finished building, the house and land (we assume) will be worth 400. We are going to have to use the equity in the unit to cover some costs and other expenses in the new home. Therefore, I may be left with (at most) 9k in equity, and at worst none.
With the research I have done I have found the rent I could get would be no more than 220 and no less than 190. Before Xmas we were convinced we would have to let the unit go, to make repayments. I got some books, including Steve’s, on PI just to see what we could do, now I’m not so sure we need to. I’m not the main breadwinner in the house and the wife is not convinced yet. Given that I don’t have much budget, I’m trying to find information on what we can do, without spending money yet. The net has been great.
I find myself feeling so stupid as I don’t know or cannot see an answer. Insert image of cry for help here! To add to this, we want to have a baby!!
So in reaching to the stars and asking the gods for help, can anyone give me an idea on how to approach this or what my possible options are. So far I have the two options, hold the unit and get a tenant or two sell the unit.
Another thing I have found is information on putting the properties in a trust. Why would I want to do that? And how can I do that? Is it too late to do it?
Some background, I’m in Melbourne’s northwest. I’m almost 30. No kids born yet. Only mortgage as debts.
So short of walking down to the local witch doctor and asking him to read my bones, I’m hoping someone can push me towards the correct path. Please note I’m not up to speed on all the acronyms you use here, so please be gentle and use layman terms.Thanks in advance for your time.
P.S. I know I sound pathetic, but I’m getting desperate….
“Not everything that can be counted counts, and not everything
that counts can be counted.” – Albert Einstein (1879-1955)Hi
You sound like my wife and I were like about 5 years ago. We now have two kids under 5. This is what we did.
1. We too had a 2 bed unit (Parkdale). We sold that and put the money/equity in our PPOR (house Aspendale) – principal place of residence. To reduce non tax deductible debt.
2. We then went to bank and borrowed 100% for a similar 2 bed unit. That way the whole loan is tax deductible. The bank just linked the two titles.
3. As we could afford it, we then purchased a few more units about 3-4 years later.
4. The only regret i have to date is that I should have bought houses not units.
I hope this helps a little. We are on the one income (mine) and I believe doing ok.
Dave, contact one of the mortgage brokers and check out your borrowing power, and also work out your exact position.
Surely you would have more equity than 9K in the house that you are building? You could borrow against that to purchase more.
Although yack has a good point if you own the unit (or almost outright), as any income is then taxable, while your PPOR (principal place of residence) loan will not be.
Cheers
Melquote:
Originally posted by NikeAirOur unit was valued at 220 6mths ago, we used the equity to purchase land and are now building. When we are finished building, the house and land (we assume) will be worth 400. We are going to have to use the equity in the unit to cover some costs and other expenses in the new home. Therefore, I may be left with (at most) 9k in equity, and at worst none.
With the research I have done I have found the rent I could get would be no more than 220 and no less than 190. Before Xmas we were convinced we would have to let the unit go, to make repayments. I got some books, including Steve’s, on PI just to see what we could do, now I’m not so sure we need to. I’m not the main breadwinner in the house and the wife is not convinced yet. Given that I don’t have much budget, I’m trying to find information on what we can do, without spending money yet. The net has been great.
I find myself feeling so stupid as I don’t know or cannot see an answer. Insert image of cry for help here! To add to this, we want to have a baby!!
So in reaching to the stars and asking the gods for help, can anyone give me an idea on how to approach this or what my possible options are. So far I have the two options, hold the unit and get a tenant or two sell the unit.Hi NikeAir and welcome to the forum,
I need some more info, How much equity did you pull from the unit? did you borrow funds for the new home? if so how much? and did you use the same lender,
One option may be Interest only repayments,
Regards
Steven.[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
VictoriaPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
My wife & I are in almost the same situation as nikeair. We will hopefully be finnished building by Sept. We will then have 2 -ve geared houses & PPOR – total debt 470K aprox value 670K.
You’re doing the right thing by asking for help and dont feel pathetic, believe it or not we all feel like that sometimes.PS Asking God for help might not be such a silly idea especially with bub on the way.
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