I am a newbie and I'm currently trying to decide whether to continue renting and purchase investment properties or buy a PPOR, any ideas or feedback would be greatly welcome.
We currently have $100,000 in savings and no debt and are currently saving about $25 – 30K a year.
We are currently paying $320 per week in rent and it is $380,000 to purchase the property. We are thinking over the following 2 options:1. We were thinking of offering to purchase the place in 12 months as this would give us 12 months to save up an extra $30K to go towards the deposit and therefore we would keep most of our savings for investment properties or we could purchase now and take advantage of the reduced stamp duty and put our savings towards investment properties in 12 months time.
2. Alternatively we could continue renting for another 5 years and spend all our savings on investment properties.
If we do purchase we would lose the tax deduction for our office and work shed which is 1/3 of the rent.Also if we do purchase would you recommend a 10% deposit or a 20% deposit as we would then pay less interest but wouldn't have much money to invest. We were also thinking about interest only for the first few years so we could use the extra savings for investment.
Thanks
Allison
Hey Alison,
You guys seem like you are in the same predicament as i am (check my post 'what to do'). I'm leaning towards renting and buying another investment property.
Quite a few questions there! Depending on where you are located, it could make a difference. If you buy a PPOR to live in and them move out, you may get the best of both worlds, being govt assistance as well as an investment property in the end, however you may not want to have to move so often and/or lose the place you're renting at the moment.
If you''ve got the ability to pay off non-deductible debt, then haivng a PPOR and paying the debt down quickly WHILE buying investment properties can also work – comes down to comfort – and then utilise an accelerated debt reduction strategy.
I would suggest that you spend some time with someone in your area that really knows what they doing, becuase I can see a lot of stuff that I would be talking to you about, however I can't offer advice on the forum being a planner. It may cost you a few hundred, but could really be worth it. If you post your location, I might even be able to refer you to someone.
FS
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