My Partner & I have an IP which currently rents at $180/wk, we bought it for $170k a yr ago and it is now valued at $220k. Our combined income is approx $100k. We have no kids. We rent a property for $250/wk. We really want to buy more properties but we’re not sure if it’s wise to buy another IP as opposed to a PPOR. Or, alternatively, do we keep on renting and slap as much onto the existing mortgage to build more equity? Who knows?!?
As you can tell we’re new to the game. [cap]
What are some of your thoughts? Thanks
its a tough decision – but do something! a PPOR or an IP are both effective wealth generators, but at least with a PPOR you get to enjoy it. I would buy a modest PPOR and try to get an IP as well (as soon as possible for both)
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Hi there,
Do a budget (even on Excel) outlining all your expenses if you were to keep paying rent yourselves verses paying off your PPOR. Also note in the budget the rental income while paying off your PPOR versus yourself to keep renting. Outline in it all the pros and cons of the alternative paths to take.
Personally I would do both. Try planning to commit half the income towards paying off your PPOR and the other half towards an investment property. Better still, if you get the right property that is +CF, the +CF coming your way from the tenants in that investment property will help pay off your PPOR [biggrin][biggrin][biggrin]- Do two things at once.[biggrin]
I tend to lean more towards owning your own home out-right – just in case something happens – you always have a roof over your head as security.
Kind Regards,
George“If You never never ask, you’ll never never know”
Hi mrsimba2
Before you make any decision, You will need to calculate your ability to service a non income producing loan, and the effect this will have on your future investment plans,Keep in mind the $7000 FHOG and the $250 per week you are currently paying in rent,
Regards
Steven
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VictoriaPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
Hi Guys
sorry i’m tougher.
if you want to make it quickly then the best thing is to keep renting and build your investment portfolio. i believe you need to buy cash pos and areas that will go up.
you are better off if you can give away the idea of your own home till you are set financially. it is far cheaper to rent than to buy especially if you live in Melb, syd or Bris.
It also comes down to your own personality but i (who haven’t rented for 8 yrs) if i had to start again would buy my own home unless the loan repayments were equal to the rental costs.thats what i’d do (but my wife wouldn’t agree).
regards westan
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