I am looking for some advice from the wealth of knowlegable people out there.
My partner and I have just returned to Aust from living abroad (about 5 months ago). We are currently living and renting Brisbane (great capital growth area) and are undecided on whether to buy a house for ourselves (get a fixer to boost equity) or continue renting and look at buying +IP (it is out there if you look hard enough). Buying our own home will stretch the budget, but with equity growth in the western suburbs of Brisbane (up to 60% in one suburb this year) we could not dream of saving the same kind of money. ultimately our goal is to build wealth through IP (like you all), but not sure which fork of the road to take to set us on the way. We are happy to keep renting, but it is dead money and making others rich!!!
Your advice would be greatly appreciated
Sommo007
“Luck is the dividend you receive, from the decisions you make”
Hi sommo007,
THere are other factors also to consider:
Do you want to stay in Brisbane? Can you manage the difference in renting and mortgage? Are you liking to want to move soon? Are you really settled?
Renting offers the freedom of being able to move – whereas if you don’t like where you live (bought home) then you have to sell before you want to (maybe).
While there are tax benefits the main reason you want to buy IP would be building wealth and you have to look at a complete timeline of all the things you want to acheive and then this will give you greater clarity over which avenue is probably best.
Will higher interest rates affect you? Which way will they affect you the least? Which way the most?
lots of questions but the answers to which will help decide the best route for you
cheers,
bluecatDo today what you want to do tomorrow
Sommo007,
Are you comfortable with the concept of renting whilst investing in an IP. The reason I ask is that many people have a preference to own their own home before they start investing.However as you have seemingly indicated, a home today may stretch you and saving money for a deposit is difficult, because the average lon-term rise in hoouse prices keeps pushing the bar further away whilst you are saving. I would recommend that you look at IP, that allows you to start building wealth, without the financial stretch. Re-asses in 12 months, and if you really want to but your own place, then you could use the equity or sell.
James
Why not buy your home first ie. FHOG then go buy another one ie. ip.
Warm Regards
ChanDollars
[Keep going, you’re on your way to financial freedom]Hi there
As the previous posts have suggested your decision needs to be a considered one with lifestyle being placed above finances.
That being said (and I don’t know what stage of life, ie how old you are) I made the choice to rent and buy a couple of years ago and it has afforded me the cash flow to accumulate faster and hopefully bail out of my 9 to 5 detention a fair bit sooner. I’m 26 and am quite happily living in a rental property in Sydney with no regrets. I think that living in a PPOR is a luxury that I will have earned in a few years. By doing it IP first PPOR second I can have both a lot faster than in reverse. I have found that the main difficulty in accumulating more property has been cash flow and living in a rental has made all the difference.
Good Luck with it and don’t stress, once you’ve had the first one for a little while you’ll wonder what all the fuss was about. So go for it & remember the cliché – time in the market is more important than timing the market.[
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