I am a single mum who is renting for $180 per week. Would like some insight into making an important decision. I have been advised by bank that I can afford to buy an investment property for $250k or by my own place to the value of $280k.
I am currently saving $800 per month with where I’m living and I am trying to decide whether to buy an investment property and stay where I am or whether to buy my own house to live in. I want to be financially better off in the future and don’t mind scaraficing now.
I would love some ideas/suggestions. Help!!!!!
Hi Kyles
First think i would do is talk to an independant mortgage broker and make sure what the Bank telling you is:
A) Do able and affordable.
Your limit.Rent is dead money – sure but then so is not tax deductible interest, however unfortunately we all have to have somewhere to live.
Subject to serviceability you maybe be able to consider both but in not such a grand style.
With your savings pattern it appears you can put the money away well. Remember that with an IP you, the tenant and the Tax man pays the interest and there are also other non cash deductions to be able to claim.
Structure them both and you could have the best of both worlds.
Cheers Richard
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I recommend you do what you feel is right for you. Are you eligble for the first Home Owners Grant? Once you have your own property then you could start thinkng about investing. Whatever you do, you should think very carefully about what you can and cannot afford. Just remember that if you did have both and had no tenant, you would then have to find both your own mortgage repayment as well as the payment for the IP.
Cheers
ToniHi Kyles,
Once again…this topic of “PPoR vs rent and invest” has been covered pretty extensively on this forum over the past week or so.
If you have a tough mental attitude, and are serious about sacrificing now for future benefits, why not purchase the absolute cheapest run down PPoR you can find and pay it off ASAP. Whatever you do don’t burden yourself with a non-tax deductible debt on a PPoR right up to the absolute limit that the lending institutions will allow you to go. You’ll never dig yourself out of that hole.
If your limit is 250K, how about a cheapy 2 bed flat somewhere for 60 or 70K. Pay it off completely and then get stuck into the investing. The banks will be falling over themselves to take your title deed on as security.
Good luck with it all.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
KylesM77,
another way of not mortgaging yourself to the hilt is to buy a plain looking house with subdividable backyard that you can comfortably afford (use the FHOG if you are eligible) and then subdivide the backyard and sell it off to help pay down your mortgage.(care when you negotiate to buy the property you are not paying for the option of subdivision)
Then do some minor cosmetic alterations to the house you are living in yourself to make it mor attractive and plan to sell it in a year or so.
Then do it all over again.
You and the kids don’t miss out because you still have a house to live in. Just be prepared to move house again in a couple of years and see if you can turn it into an adventure – a fianancial freedom adventure![exhappy]
Its one way to fast track your way out of home debt.
hi KylesM77
have a read of the post for the last week get an understanding of the different types of investments and why people invest in different ways.
I do not have age, race, number of kids, or ages of kids, because you are a single mum works both ways easier to move easier to make decisions,
My advice is first read and if need be post again with (single mum needs help) and let me read.
But this time let me know your goals for 5 years from now. and a couple of people can give you very valuable advice.here to help
Your limit.
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