Opinions sought..
I have just listed my PPOR on the market as with a new baby on the way we need another bedroom. Now I have subdivided before, and I’m not fussed about doing it again..
We are sticking to the general area where we are now because we are committed to my daughters school.
I have seen 3 properties that have interesting characteristics and I’m interested on people’s opinons.
Property 1 is in a suburb with great fundamentals but is not considered a top suburb. Its 8km from the city however and I think it is a good area. The block is 765sqm but has no subdivision potential. The present owner has crap taste (astroturf and lattice all over the place – ugh!). Its been on the market for some time and I could sell my place and buy this place and have $10k in loose change.
Property 2 is a better suburb and is a similar block size, 1930’s character house in good condition. After selling/buying i’d be around $50k in non deductable debt. There is no subdivision potential for this one either but its is certainly a nice house 6km from the city.
Property 3 is in a better suburb again and is flat, huge and very subdividable. The front (fibro) house is average and has *just* enough room lifestylewise. Just to sell/buy this property would put me $100k into non deductable debt.
With this property, I could probably subdivide ($25k) and build a 4*2 on the back for around $145k. The front subdivision would probably sell for $270k making it a breakeven proposition (right now!) where we end up with a new house in a good suburb but in a block that has no potential thereafter.
Oponions?
I guess one has to weigh up the benefits of no interest costs vs the suburb itself. Because all are in close proximity, the fundamentals of transport and infrastructure are similar..I worked damn hard to eliminate my non deductable debt and I’m not keen to get into it again but for the right reasons would do so.. Of course, we are in a bear market right now and my spider sense tells me that its not going to change in the short term.
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http://www.ez-rent.comWhy dont you rent for 6 months and see where the market goes? You sound like you’ve got lots of money to invest, why dont you sit on it and wait and see what happens?
Rents are low, gives you time to think, and a $300k house could be snapped up for $250 by the time your lease expires?Hope this helps G7 [eh]
Even though the third probably has the most potential (includiing CG+ if left as if due to yard size in the long run), the fact that you have another one on the way and may interfere with what is best for the family. Does any of the houses cope with further family expansion (no use in buying a house for one extra bedroom only to be stuck again if another one comes along). I’d probably go the first one as it will allow you to go through the expanding family part relatively unscathed financially. Either that or as G7 suggests and rent for a bit looking for the best abode while putting the money to work elsewhere. You never know you may invest in a few CF+ve places just by spending the time looking for a decent PPOR [party]
Don’t mind lattice myself (probably the plastic variety as the wood one tends to warp and looks unsightly after about 5-10 years). The astroturf (or gabba grass as it has been known as in brissie cricket) would probably go, it is usually laid on concrete and given they guy’s taste may not have been a great job either. You could probably get away with paving over or laying gravel with stepping stones (pavers would be more kid friendly IMHO).
I tend to think more about the ripple effect, if suburbs 6 kms from the city are sought after it wont be long till 8 kms are sought after even if there not now. Id be looking at how much space is around these areas for future developments and if there isnt much vacant land left the 1st option of 8 kms will be vary valuable some time soon in the near future.
By the time your new addition to the family is ready for his/her own room then you may have a very nice capital gain to upgrade again.
It also helps you from getting into non deductable debt again.
Good luck with your new baby and your decision.Regards Risky
If you want the rainbow youve got to put up with the rain!
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