Hey everyone,
I brought my first home on my own about 4 months ago now and all is going well
My gf and I are now discussing our next option. I have 2 more months to go living in the townhouse as I receieved the first home owners grant. My gf is considering purchasing her frst home for about $250,000. She has a $40k deposit and has verbal approval from the bank for a loan of $270,000.
A townhouse in next to mine with exactley the same set up but with a smaller courtyard is renting unfurnished for $400 a week. Mine is furnished so hoping for at least $425 a week when I rent it out in 2 months. My repayments are $1600 a month. The townhouse was valued by a BANK at $385,000 with $300,000 owing.
What would be the best option, my gf buy an apartment or small villa close to the Perth CBD and I live in there paying $75 – $100 a week and having my rent cover my mortgage, both of us save for 12 months while living in the apartment then go together and buy 1 bigger house with our combined income of $110,000 and deposit of about $60,000 between us so about $550 – 600,000 house
or
Do the same thing but after 12 months buy a do-up apartment for $200,000 (turn into + geared) and a smaller house worth about $400,000 in a not so good suburb
So in the end hoping for
1 positively geared townhouse – IP
1 neutrally geared villa – IP
1 neutrally geared apartment – IP
1 PPOR – ($400,000)or
1 positively geared townhouse – IP
1 neutrally geared villa – IP
1 PPOR – ($600,000)Any other ideas?
Thanks for taking your time to help out!
No one willing to spare a few thoughts?
Hey,
There are a few more variables to add to your analysis….
Management fees, rates, insurance, nil occupancy periods, maintenance and with the finance LMI and stamp duties etc etc.I admire your enthusiasm, however going into(by my calculations) over a million dollars debt within 18months puts you and your partner at massive exposure to any potential downfall in the market – of which Perth may be a fantastic candidate.
I would exercise caution. Learn a bit more and reduce your exposure by taking smaller steps.
If you do however choose to take on this, id want to go in fully prepared. Talk to your Mortgage broker about the best way to finance these deals…. starting with Interest Only for a fixed term(if you havent considered that already). Talk to your accountant or a depreciation specialist about any potential taxation gains that each property would represent. Going in prepared may reduce any fallout but i still think that either of the mentioned scenarios are a recipe for disaster. Forgive my pessimistic outlook though.
If it was me, and i wasnt that different to you by the sounds of things. I would encourage your partner to take advantage of the increased first home buyers grant and purchase soon, you can rent out your property and make up any difference with repayments. Then I would wait a little bit and possibly purchase your 'do-up' apartment and have a crack at that to build some equity. Sit on that for a bit and see where the market lies.
Just my 2 cents.
Hope this helps
Mick
You must be logged in to reply to this topic. If you don't have an account, you can register here.
