Hi all,
My partner and I were one step away from signing the dotted line for an investement property purchase. We then found out that we both lost our jobs.
As horrible as you can imagine this to be, we are now face with another frustrating problem – if you can call it that. We are stuck as to how we should/can invest our funds as obviously we can't get a loan without an "employer" This is our situation:-We have cash saving of $100k
-We have equity in our current investment property of $170k; this property is currently rented and covers 2/3 of the loan repayments (loan outstanding of $140k)
-We have a managed portfoilo of $70k
-We have no other debts excpet credit card of $3000How can we best invest our funds? It is too much to be left just wasting or sitting around now without investing it wisely…real estate has and is the way for us but what chances do we have of that when we both have lost our jobs?
Any advice would be verymuch appreciated
Thank you
QM.
Well first of all although you have both lost your jobs which is devestating enough – your fortunate this happened before you purchased your property, even if it was positively geared or positive cash flow lose a tenant or they dont pay their rent you would be up shits creek. They say unemployment should peak by the end of 2010 ( who knows) 8 to 9% so it could be a hard road ahead. You already have $70000 worth of managed funds. I'f it was my money I would go to http://www.ratecity.com.au/term-deposits/ and put your $100k into the best short term deposit rate you can find ( not very good at the moment) – You got plenty of equity to buy property when your job situation improves. Alternatively if your paying rent – or a mortgage on a PPOR and having trouble making ends meet might be an option to reduce the mortgage on your Investment Property – wont be any tax advantage if your not working. Hope this helps.
PS: I work in the mining industry so my working days may also be numbered – plan to become a professional surfer if I become unemployed just need a board
It's hard to say what you should do without knowing more about your personal circumstances. I personally would pay off the credit card and as much of the loan on the rental property. Being debt free is a good thing. Especially if you're unemployed.
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