My husband and I are thinking of a few strategic things at the moment and would like everyone’s opinion.
Our PPOR is a 2br home in inner city Melbourne, we bought it for $345K and now its worth conservatively $580K and rising.
We took out additional loans on the growing equity 2 years ago to fund to IPs (total loan is now $290K). One IP which is on wraps and doing well, the other on a LO but only just covering our costs. We would like to reduce our debt on our PPOR and get some cash to start investing in maybe other properties at 80% lend and also some into shares.
One of the options would be to sell up now and move out to somewhere like Mount Eliza where its relatively cheap (we are looking at a place around the $480K mark) and has the lifestyle which is great but has a potential for capital growth. That way we would reduce our PPOR debt by $58K (after selling, buying and moving expenses-this is all based on a conservative estimate on selling price) which would then put our LO into the positively geared section. The extra $5K a year saved would either be put into some other investing strategy. It would also mean that if the WRAP property and LO property people went belly up (which happened to us for a period of 6 months last year) we would be able to pay for all the debts without being in the red. Plus we're looking at setting up a B&B or a self contained accomodation which would also bring in some income.
Or do you think it would be better to look for a better interest rate deal on our PPOR and take out extra equity for investing? I’m loathed to do that as it will just make us more and more in debt in our PPOR.
What do people think? Or is there another way that we should be thinking of besides selling up the PPOR and living in a rental place?
Thanks
Vanessa
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