Hi All,
Just finished 0 to 130…loved it!
I realised from the first chapter that we need to solve our money problems before we can even think of investing. Our home we live in is costing us too much in repayments, we just can’t afford it on one wage. We are just surviving week to week and want a better alternative. I know the simple solution is to have two wages but I have 2 small children, one of which was diagnosed with cancer last year, giving me a new perspective on spending as much time with them as possible. If we sell our house we make 100K profit and renting will save us between $100-$150 per week. We will then have the start up cash to fund some investment properties with a positive cashflow. I basically want to generate enough income from positive cashflow properties to supplement my husbands income to eventually buy again for ourselves without the financial hardship. Am I dreaming? Is this a bad idea? Our accountant says we would be taking a huge risk and would likely be worse of in 5 years time than if we were to struggle with 2 jobs and keep the house we are in. I dont agree with him however and would like some other opinions on this topic. Can anyone help?
Thanks,
Rachel.Rachel77,
Sorry to hear about your child, I wish you and your family the best for that.
One thing about this forum is that you will get some great ideas, insights and next steps about your situation.
Initial suggestion from me, would to be examine the option of renting out your current PPOR. At the same time, if you downgrade (hate that word) into something more modest (renting is what I am assuming), you get a benefit from that. (Your first IP without the need for stamp duty and other legal costs)
You may be able to negative gear your current PPOR, which may through a tax variation, reduce your husbands weekly tax bill.
These two factors should be able to assist you in saving a little more.
You may be able to re-value your PPOR and allow you a deposit for a +ve property.
If you keep renting in the longer term and don’t buy another PPOR, then your new IP (old PPOR) can still be sold without capital gains tax applicable within the next 6 years.
In your search for an accountant (previous post), I would think that trusts may be an alternative worth pursuing and finding out more.
James
Hi James,
Thanks, he is doing really well, finished his treatment at the end of last year which is why I have the time now to look into property investing.Our accountant(the disappointing one) suggested the same as you but it would leave us in a very similar situation as we are in now as we would still be having to put $100 in a week to cover the repayments, and thats best case scenario. We would recover about $1000 in tax benefits which works out to approx $20 a week but then wouldnt have much to invest in property elsewhere.
When our son got sick my husband took 6 months unpaid leave from work. Our bank kindly deferred our mortgage payments but of course the interest kept on coming in thus taking our loan up about $7000. This meant higher repayments when we could start paying again and of course with the interest rate rise…well, you know. I worked 3 months full time to get square with other bills but I see the benefits of staying home with my children…you just dont know how long you have them for.
I guess the main thing I worry about is going backwards. I can’t really see us losing money by doing this, maybe we will break even if it all goes wrong. Am I being realistic? Do people lose out on this kind of thing. I mean you would surely at least make the same amount back if you had to sell right? Less the stamp duty, agents fees and legals I guess.
In some ways I think I am thinking too much about it and should just go with my gut feeling which says this is the best thing to do at this time.
If only I had all the answers!!!
Thanks for your help,
Rachel.
Hi Rachel
I don’t know if this helps but my husband and I are in similar situation. Repayments are too much, living week to week. Renting we would have $200-$250 each week more and about $300,000 in our pockets if we sold. Although we dont have the worry of a sick child. I tend to agree that the time with your children is the most important.
We are currently in the process of speaking to agents, getting valuations on our home and finding out as much information as possible, before signing on the dotted line.
However we are now 99.9% sure we are selling and will put our money back into +CF properties. We feel confident that this is the better way.
Good luck with your babies and your decisions.Rhonda.[
]Hi Rhonda,
I’m glad to hear that someone else is thinking of doing the same thing. It doesn’t seem as crazy when you’re not the only one. It’s hard to take the plunge though isn’t it? I thought I knew a decent amount about the whole property investing thing but reading this forum has shown me thats theres a whole lot more to know. I dont necessarily aim for riches just comfortability and the opportunity to enjoy the important things in life…like children. Let me know how you go, maybe we can support each other and help with the scariness of it all. Have you got a good accountant? I’m looking for one, some people on the forum have given me some recommendations as the one we had was not into any of this.
Good Luck, Happy Hunting,
Rachel.Hi there.
Sorry for your troubles too. Things like this out of the blue happen, we have no control but by golly we learn a lot from it.
If this helps:
I had a daughter 20 who had a little un, my granddaughter. The short version, problems, breakups and other issues, I ended up with the care of my grandchild, my daughter a missing person.I had a mortage, I was nearly forced to sell and didnt. I am glad I didnt because this house rose in value, gave me equity to go on to purchase another and more since.
Yes I struggled, went without, did what most wouldnt dream of doing. I am single ona single wage. I supplement things, and my daughter has the advantages. She rents one of my homes, this will be hers anyway one day. So she helps me to help her.
I cant tell you to sell for positive properties, there are many ways to acheive things but I would ask you, is the added pressures of the property market, the time you might spend the money issues etc what you want? Is there something else that can supplement your income?
I dont know, only you can decide this. I admire you wanting to get going, I just remind you of the fact that you have stated family are imporant (and they are) and property can be time consuming, way up the pros and cons
I tend to agree with your accountant. I sold my house when my marriage failed years ago. I had my daughter to care for. Child support was 30 a month, mortgage was a lot lot more.I ended up in the rental trap for the next13 years before I could even think of buying a home. I would never recommend doing that….unless you down grade as already suggested, just so you have some sort of home and this might increase as in capital growth. You might save more this way, and have some spare cash or even just to reduce mortage then start building a buffer in that to then use the equity…
just my thoughts
goodluck
Elves
Hi Rachel,
Let me first of all say – best of luck with the little tyke.
I am assuming you and your family are ‘youngish’ and you therefore have ‘investment time’ on your side. As such I think all of your energy should be directed to your family’s immediate needs.
Without knowing some crucial details (and you don’t have to answer) like income levels, capacity to borrow some money, existing debt to value ratio of your current PPOR, where you live and likelihood of future growth, the possible future need to move to be closer to a hospital etc it is difficult to give a definitive answer.
However if you can’t ‘jiggle’ things around to release the financial pressure you may well find the overall situation becomes unbearable – I sincerely hope not.
As such, and dependent on some of the answers to the earlier questions, downsizing may well be the answer, on the proviso you put the profits into a redraw account on the new mortgage so they can be accessed for investments when your ship is a little steadier in the water.
This way you will still have the advantages of owning your own home (or part thereof), some equity to access when the time is right, more manageable repayments, and the capacity to focus your attention on the more important things in life.
The ramblings of someone who has never been where you currently are.
Derek
Hi Rachel,
I havent as yet found a good accountant, but am in the process of ringing around. I also was given a few names off this forum (thanks everyone) but I am in Sydney and would prefer someone here.
Will keep you informed with my discoveries.Regards,
RhondaThanks all for your advice, it really is hard to tell which is the best way to go.
When our son got sick we realised the small importance of material possesions. It’s all about comfortability not necessity. My main purpose from this venture is to have enough passive income coming in so I dont have to work and thus spend the quality time with my children. I realise having IP’s requires management and that involves work but as such it would be from home and something I can structure for myself. We are still young, (I’m 25) and so I guess can afford to make some mistakes, although I hope we don’t.
I really think this forum is fantastic for those without a lot of knowledge, as it gives more than one opinion and option through others suggestions.
Thanks again,
Rachel.
Hi Rachel,
I know you have a lot on your plate at the moment …. but there are other possible solutions to give you a lift….
You could: Wrap your house and instantly increase your income….. you could use a lease option which will do the smame thing and give you capital growth if the option is not excersized… you could find a private lender or two and go buy some positive cashflow properties….. but learn all you can about all the facets of the wealth path … and wyou will find diamonds amoung sand where others fail to see them….
Best of luck and I really hope you and your family get a break and all will be good for your futures!
Best Wishes
Kiwi
[^]Hi Rachel,
A technique we often use at work when exploring options is to analyse each and everyone in a methodical approach.
Sit down with hubby and do some brainstorming (write down all your options without trying to sift the good and the bad ideas) yet!
After you have completed an extensive brainstorm then pick a few (5 or 6) of the more viable alternatives and analyse these carefully using a plus, minus and interesting ideas (all the good and bad and other points about that particular suggestion).
This way you may well be drawn to the obvious answer.
I suspect in your situation you will need to be quite calculating about your options as there are so many emotions involved at this stage.
If you need more information about this technique then PM me.
Derek
Rachel, what about working opposite shifts? When my second child was born intrest rose to 18% My husband and I worked opposite shifts in order to keep house & not have children cared for by strangers.Just a different view.[
]
]
]You must be logged in to reply to this topic. If you don't have an account, you can register here.
