Hi Guys,
First of all, thanks for all of the information you are all responsible for that appears on this site. It is an absolute treasure chest of quality information and I have learnt ALOT over my lurk time here. Hopefully some day my contributions will also be beneficial to newcomers.
I am looking for advice and ideas on where we should proceed to next.
Our goals are to of course, own our own home, and I would also like to build up our portfolio over time to include investment properties. The crossroads we are at at the moment is – what to do NOW.
We will be leaving locality in two years time, likely to the ACT (with work).
We currently have approx 33k in savings, growing week to week.
I am eligible for tier 2 Defence Home Ownership Assistance (Subsidised up to home loan of around 260k @ $280/m or a lump sum payment which would be in the ballpark of $13,500 – consisting of four years subsidy payments lumped)
The only problem I see with the DHOAS is that I am limited to the NAB, Defence Force Credit Union or the other ADF Credit Union for finance.
We are currently renting at $220pw.
I will be debt free in about 12mths time, however the few grand I owe is interest free.
I am a little nervous about the market at present, and whilst I know you are all likely to say that getting into the market is the important part, due to our circumstances – holding for 5+ years may not be as simple as it is for others (due to moving around a bit)
I am not sure whether we should purchase a home here, now, live in it for a couple of years and then venture off to the ACT in two years time, possibly renting out what we have here and trying to start again in the ACT.
I have also considered continuing to rent and purchasing an IP in the ACT and letting it accumulate some equity between now and our eventual move.
We have a dual income of about $115,000 or so and I am currently keeping about $100/fn aside for my schooling (Fee paying student through Uni – part time)
I know I haven't given you much to work with, and I apologise. Hopefully with some prompting I can give you more specific information to assist.
We are keen to get our future on track sooner rather than later. A little shove in the right direction will be appreciated very much.
Thanks for your time.
Cheers,
Damo
EDIT: And no, I won't qualify for the FHOG as my partner has already owned previously.
Where do you live now?
Humpz wrote:Hi Guys,Our goals are to of course, own our own home, and I would also like to build up our portfolio over time to include investment properties. The crossroads we are at at the moment is – what to do NOW.
We will be leaving locality in two years time, likely to the ACT (with work).
We currently have approx 33k in savings, growing week to week.
I am eligible for tier 2 Defence Home Ownership Assistance (Subsidised up to home loan of around 260k @ $280/m or a lump sum payment which would be in the ballpark of $13,500 – consisting of four years subsidy payments lumped)
The only problem I see with the DHOAS is that I am limited to the NAB, Defence Force Credit Union or the other ADF Credit Union for finance.
We are currently renting at $220pw.
220 p/w = 11,440 down the drain each year * 2 years = $22,880. or a $105,000 loan over 20 years at 8% p/a
You can't buy much with $105,000 so it might be prudent to pay rent until you have to move to ACT
Then buy in ACT $350,000 to $600,000 you may need to borrow more than 260k in canberra.
You may have to look at a unit.Humpz wrote:I will be debt free in about 12mths time, however the few grand I owe is interest free.
I am a little nervous about the market at present, and whilst I know you are all likely to say that getting into the market is the important part, due to our circumstances – holding for 5+ years may not be as simple as it is for others (due to moving around a bit)
When you move to canberra a lot of people in your situation do the following.
Buy house / unit –
pay off as much as possible while at Canberra .
Then move
Rent out Canberra propertyBuy a another property in new location
pay off as much as possible while at new location.
Then move
Rent out old location propertyBuy a another property in new location
pay off as much as possible while at new location.
Then move
Rent out old location property(Previous accidental property investors in Defence force API Magazine)
Humpz wrote:I am not sure whether we should purchase a home here, now, live in it for a couple of years and then venture off to the ACT in two years time, possibly renting out what we have here and trying to start again in the ACT.Depends on how much properties cost at Here. You may be able to buy a Unit and try to pay off as much as possible in the two years and then rent it out and use it as collateral for the Canberra purchase.
Humpz wrote:I have also considered continuing to rent and purchasing an IP in the ACT and letting it accumulate some equity between now and our eventual move.I thought of this but wasn't sure if you would get the subsidized help from the defence force if you do this ?
You need to check if this is allowed for the subsidized help.
I think you mean you would move into IP in two years time if so you need to get valuation done for capital gains tax cost base for PPOR cgt exemption status and your records.Thanks for your views Duckster. It's certainly food for thought.
I'm currently living out at Lemon Tree Passage (Port Stephens) and there are plenty of options at $250,000 and below. I am not all that confident in the area itself however.
I wouldn't be entitled to the subsidy if I purchased the IP in Canberra as there is a requirement to live in it for the first twelve months I believe.
Thanks again. It gives me more fuel to burn whilst brainstorming.
I wouldn't worry about moving and owning IP. As long as you have a great property manager it is fine. We have our very first property in another state which we bought while we were living there. We knew we would have to move in around two years so bought something that we could live in and that was easily rent-able.
If you have a look at the growth of your area now and if there is anything new happening, infrastructure etc then you should be able to see if it is worth it. Also if the rents are good and the prices are cheap might be ok. Always homework.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeHi Humpz,
Know this is a bit late, but hopefully you may find something out of it. There is much more to consider than could possibly ever be covered by this forum. Options could be :
1) Continue renting, save up bigger deposit & have larger amount to purchase property in Canberra.
2) Buy now & rent out when you move to Canberra and purchase new PPOR.
3) Buy now, sell when moving & purchase new PPOR in Canberra.
4) Continue Renting & purchase IP at Canberra.
Pros/Cons :
1) Pro = Bigger deposit & less Mortgage Insurance charged by bank. Rent money is not necessarily dead money if you use the excess cash wisely.
Will not have to pay costs to purchase where you are now, then again in Canberra (no tax advantages on PPOR purchases).
Con = House prices could go up & lending ratio (amount you borrow to value of property) could stay the same or worse.2) Pro = Own house sooner.
Keep excess cash in a Mortgage Offset account so you can use it to purchase new house in Canberra.Con = Paying gov & bank fees & charges now & again later on new purchase.
Will you have enough equity to cover both loans?
No tax advantage on PPOR.3) Pro = Will come down to your personal preference this one
Con = Fees, fees, fees. Buying fees, selling fees. If the property doesn't increase in value of what you purchase + what it cost you in fees, then you fall behind.
4) Pro = Tax deduction on fees/charges used to purchase property.
Con = Extra stamp duty & possibly other fees (unsure about Canberra).
Have to work out CGT when you sell (get valuation just prior to moving in & hold on record).
Seek accountant advice, or if you get access to financial planners (etc…) through ADF use them.Advice is general & information given should be confirmed by professional accountants/advisers. Just trying to give you a start to the questions that you may need to ask them.
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