Hi all,
Just wanted to ask your opinion on my situation.
I am getting married soon
and will probably be looking to start a family shortly after, and am not sure what we should do property-wise.The facts:
– getting married next month – yay!
– looking to have kids (fingers crossed they get HER looks) shortly after
– we are currently living in a two bed apt – value low 600Ks – remaining mortgage – about 100K
– we have another investment property – value low 500Ks – remaining mortgage – 380K
– we have savings (lets say about 200K)
– we will want to upsize to a family size house for the long run
– where we are now can easily accommodate one baby, so we could be good here for another 2/3 years, until timbo.2 arrives.The question:
Should we look to buy our family house now , or wait till we have timbo.2 before pulling the trigger?
The thinking is that after #2, we will more clearly know what we are after in terms of a family home.
Also our financial situation may be very different in 2/3 years time than it is now, so we will have a better understanding of how much we can afford.Any thoughts or opinions would be appreciated!
Timbo
I am a long time lurker very limited postings ….and I am no expert and can only give you benefit of personal experience
My advice is …..do whatever you can to hang onto the investment properties! Or at least oneof them, the equity you have in 1 iin your current residence is a brilliant start.WHY
Reasons are:
cashflow when your wife stops working
equity
future capital gains* My wife & I when married in 2003 had 2x IP in Sydneys east worth $950k with equity of $400k.
* Sold 1 IP … and bought bigger PPOR as keen to get family started.
* Straight away goal achieve & 9 months later wife stopped P/T work to have1st child. So had 2x properties worth $1.2mill with equity of 450k
* Surprise 2nd child straight away so still 1 income
* Obvious wife working very little for next few kids.At this point even though I was always primary earner & negative gearing is good – well to a point…..but too negative is painful!?!
Had to sold IP to relieve pressure.Since then put capital gain into reno of PPOR, it is now 950 with equity of 540. All good but kids now require more space so meed to upgrade PPOR more non-tax deductible debt to 4bdr house in Sydney with a yard, no thanks
So Timbo we are better off then some but realise should have kept 1 of the IP even the cheaper one with more equity.
Also reno looks good but look at all other IP could have owned, still planning & schemingPS: Kids are great, the best things ever
enjoy
Hi,
Couple things about kids. They walk. So at anywhere from 10mths to 15 mths they will start to wander around. Near those stairs, near that brickwork that juts out just at the right height to hit their head on. the back yard suddenly shrinks from HUGE for you and your wife to NOT big enough for an exploring toddler.
We moved into a 3 bed unit (renting) when I was 5 mths preggas with our 1st child. We moved when he was 11mths as we had STAIRS! No backyard, 3 sets of stairs and we had heaps of space…….until we had kids.
Now we have 2 kids (hopefully but sadly probably the end) and we live in a 4 bed 2 bathroom house and the youngest is only 11 mths. Kids get everything in a house. You need a bigger car to fit the giant car seats in. Bigger car you get. They need a yard to play in right? You get a house with yard. You have a sibling for them, sibling wakes them up, separate bedroom right?
Hahaha it just goes on and on but is so fantastic and fun that you really don't care in the slightest that every dollar you get you spend on them and every minute you get you spend on them. Very fun!
I would advise renting the desired family house first to try before you buy especially if you are not quite sure. Having kids is nothing like you think it will be no matter how you picture it. It would not be the best to buy something that you think is right only to have to move later and try and rent it out quickly or have to stay on and suffer. And trust me and your wife, you will suffer if it isn't right
Enjoy it, kids don't stay small for long. When they can walk and talk they start telling you what to do! (He is only 3!)
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeDragon72, Thanks for your response, and advice.
Yes, definitely agree with you – we want to keep both current properties when we eventually decide to buy the family abode.
The current investment property we settled early last year and it has been surprisingly pretty much CF neutral (before depreciation and other deductions etc…) since day one.
The current PPOR was rented out before and positively geared, we moved in after coming back from OS last year and have done some minor renos – they look great and we reckon it will add 30/40 per week in rent when we move out.
This will mean re-financing both current properties probably to as much as the banks will let us without paying extra for mortgage insurance and working out how much we can sensibly afford after that.
However, the concern is that if we wait 2/3 years, property prices will continue to increase, and we are no better off than if we were to buy now…
DWolfe,
This is the other side of my dilema.
We want to wait until we have an idea of what we ACTUALLY need instead of what we THINK we need now.But then will we get overtaken by property prices?
Where are you? Melbourne I am going to say yes. Melbourne is going to go through the biggest 12 to 18 mths of crazy. Sydney? Probably. Perth? Probably. If you think you are going to get priced out quickly then get in.
I would love to own my own home…….but the home I "want" is a double block in Camberwell in Vic with a Fasham house on it. It also would have a 10 person spa and a giant hedge that is manicured by my gardener. Oh by the way when my cleaner comes she brings her team with her.
So until I can get my dream home I will invest and hope that the decisions I make lead me to my house goal and the many other goals I have in life some which involve money and some that don't.
The main thing is to do what works for you and your family. We have to move all the time for my husbands work, so buying a house to live in for us would be idiocy. Whereas if you never had to move ever than in your area it may make really great financial sense. Keep thinking.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeTimbo,
You are in an incredible positive to invest. With so much in savings and quite a lot in equity you should start to think about investing in positive cashflow real estate. The sooner the better.
If you take your $200k then you could buy quite a few positive cashflow properties. In 2/3 years time when you have baby number 2 then your positive cashflow properties will be able to pay for the mortgage on your family home. Giving you more freedom with your money.Just an idea
Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just A Click AwayRyan McLean | On Property
http://onproperty.com.au
Email Me
and will probably be looking to start a family shortly after, and am not sure what we should do property-wise.
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