We have just been faced with an interesting situation which seems to be more of a dilemna. Our next door neighbour is putting their property on the market with an agent in a week. We found out today that they are selling, and are looking for about $150,000 for the property. This is a reasonable price in the current market of the area, and the house would need only a few minor touch-ups to prepare it for rental (paint, etc).
Our dilemna is that we would love to buy this property also as a way of expanding our backyard. Both blocks are long and narrow, and for us to fence part of that block as ours still leaves a sizeable yard for prospective tenants. However, I am doing the sums, and it might be a stretch for us to do by ourselves. By looking at similar properties, we should get $180-200 rent per week, but I just don’t know if that will be enough. We may yet have the option of buying this in partnership with a family member (with contracts drawn up to protect us all, obviously), and I guess we have the idea that if we are struggling, we can always sell again. We just think this may be an excellent opportunity, and is it just too good to pass up?
Any ideas would be helpful. Oh, btw, we could probably get only about $5000 redraw equity on our own home (only been here 18 months), but could probably get at least $40,000 by refinancing. But we also have plans for a $20,000 extension to our own home soon, so don’t want to use up all our equity on this other house….
Thanks for your help
To avoid LMI you will need to come up with 20% plus costs from your current loan. But you can go as low as 5% and still buy it with the appropriate fees.
Can’t really advise much more without knowing your full financial position.
Sounds like good opportunity for you. Buying the neighbours property can sometimes create a bit of synergy as the result may have development potential.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi minime
Contact Simon to check out your borrowing capacity etc. And what deal you could get on a refinance. You never know, you might have access to more than you thought. It’s a great option to buy though – possible future development site. In the meantime, continue enjoying the place etc.
Cheers
Mel
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