I am desperate for advise…I am 40…recently divorced with 2 children under 10n years of age…I have been in the same job for 9 years…I need to relocate away from the ex….looking at sydney or adelaide. I have nothing…no home..no car…no furniture…just clothes and shoes!!! I have $100K from the divorce settlement…how do I rebuild my assets without wasting or losing more money? Anything…really any suggestions will be greatly appreciated. I have racked my brain for sooo long and so hard…I'm still confused and don't really know what my next move is. If I relocate I will have no job…so I thought I'll buy before I relocate…at least the banks will see I have a stable job? What do you think?
Wow, I do feel for you and your situation. It's a BIG question but here's my advice for what it's worth:
I understand you'd want to relocate away from your ex BUT if doing so means you'll lose your job and then not qualify for another mortgage, then you'll need to seriously consider the impact of that. Especially given you want to 'rebuild'. Also consider the travelling expenses for the kids to and from you and your ex.
I'd invest your $100k into a deposit on either an investment property or your own home. Don't let it fritter away.
Its easy for me to say; I'm not in your situation but here it is anyway … don't be too proud, start small and start now! You don't necessarily need to buy the most expensive home or the biggest to have a happy home. Maybe consider a unit or apartment. I know, with kids its not ideal but you're starting out again, you have to start somewhere. Work on paying it off as quickly as you can, even renovate something with a view to renting it out later. Kids will be happy with you wherever they are and as long as you're happy too.
With a few years under your belt and equity building up, you can look to something bigger, better or more desirable.
If it were me, I'd buy the property and apply for the mortgage before I gave up my job because as you've already said, it will be harder to get a mortgage without job stability. Adelaide homes are cheaper than Sydney homes generally (although you can get a bargain anywhere).
Given that you're currently renting (I assume), then perhaps you can still afford to rent and pay the difference on a mortgage on an investment property? If so, then you may be able to buy an investment property, keep on renting till you decide exactly where you want to live whilst getting your life sorted. In the meantime, you're investment is gaining equity and will be hopefully fairly close to positively geared (or at least not costing you too much). If that fails, you'll have a the property to move into anyway.
Its such a BIG totally personal question … so I hope I've helped a little.
Cheers
MichelleHi there
One idea would be to buy a property, but not live in it (ie put tenants in it). You could then rent elsewhere. The reason is that you would then enjoy some benefits which you would not enjoy if you lived in a place that you own.Work out the income (ie rental return) on the property. Then subtract the costs (some examples listed below). If the result is a negative figure, then that figure is declared on your tax return as a deduction, and as such you get some of your tax back to help you pay for your property. Nice, huh?
Here are some examples of "costs" :
– Loan interest is tax deductible
– Costs associated with the property (rates, insurance etc) are tax deductible
– If you get a depreciation schedule done on the property (done by a Quantity Surveyor for about $400) you can tax deduct the "depreciation" on the building, floor coverings etc. The maximum depreciation seems to be available on new properties, but you can still depreciate renovated properties.The third item above is the best deduction of all. It's a "non-cash" deduction which means you don't have to pay money each year as you do for insurance etc, in order to get the deduction.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
mmm- based on seeing many cases in my office like this and advising on them- I can say I see a lot worse that your situation, and if you still have 100k, health, young age and your mental faculties things look bright. Probably the most important thing is to stay close to your kids and not move away from them, take a mini holiday, join some gym, sports groups, and keep active, as your kids really need you also. I went through my parents divorce and was very sad my mum moved away, and took my younger brother and I stayed with Dad to help look after him- shop, cook, look after my pets, and stay in my school.
Maybe move a different suburb or different type of home/ apartment, keep your job as in all of this situation try not to make too many radical changes, make changes slowly and it will be easier- rather than job, moving, and isolating yourself away from your children/ friends/ rels.
Join a soial group, Im not sure if you have faith but maybe going to church 1 x per week and meeting new friends, prayer etc also helps a lot to give you strength.
Try not to focus too quickly on building wealth, money, assets etc as your mind and emotions probably need a little rest and time to recover, otherwise youll wear yourself out to a haggard mess.
Regardless of your ex, you have kids to raise and probably will one day need to make civil relations with her if the kids are sick, or go wayward they will need both parents.
Im not sure where you are based but Im happy if you give me a call as I have lived through all of these things with my parents, and seen all the results of divorce. Please email me your phone number or email and Im happy to have a little chat with you.
By trade I am a property advisor and specialist but I am happy to have a general chat with you
businessglobal wrote:mmm- based on seeing many cases in my office like this and advising on them- I can say I see a lot worse that your situation, and if you still have 100k, health, young age and your mental faculties things look bright. Probably the most important thing is to stay close to your kids and not move away from them, take a mini holiday, join some gym, sports groups, and keep active, as your kids really need you also. I went through my parents divorce and was very sad my mum moved away, and took my younger brother and I stayed with Dad to help look after him- shop, cook, look after my pets, and stay in my school.Maybe move a different suburb or different type of home/ apartment, keep your job as in all of this situation try not to make too many radical changes, make changes slowly and it will be easier- rather than job, moving, and isolating yourself away from your children/ friends/ rels.
Join a soial group, Im not sure if you have faith but maybe going to church 1 x per week and meeting new friends, prayer etc also helps a lot to give you strength.
Try not to focus too quickly on building wealth, money, assets etc as your mind and emotions probably need a little rest and time to recover, otherwise youll wear yourself out to a haggard mess.
Regardless of your ex, you have kids to raise and probably will one day need to make civil relations with her if the kids are sick, or go wayward they will need both parents.
Im not sure where you are based but Im happy if you give me a call as I have lived through all of these things with my parents, and seen all the results of divorce. Please email me your phone number or email and Im happy to have a little chat with you.
By trade I am a property advisor and specialist but I am happy to have a general chat with you
The kids will come with me, I'm cool about the divorce, I want it more than him, I will never get in between him and the children, just that he really wants me to stay, and I 'really' want out, that's why I've gotta move away from him. The thing is, He is the main income earner, not me, I took care of the children and the home and bills etc, but I don't care about money, I just want out, I care for him, I dont love him, but I need to rebuild without him.
oo3c, you go girl!! You're the same age as me, kids similar too … you've made the decision to go, so be positive, you can do it, look for better. Getting rid of the negative crap in your life is liberating and you'll be surprised how different your life is.
I'm a firm believer that once you've decided what you want, there's no point hanging around … just do it. So, have a think about everything you really want to achieve now the decision has been made, figure out how you're going to do it, set some goals and work towards them … baby steps are good, start small as I suggested before.
I get where you're coming from and really appreciate that you want to do the right thing with the money and the kids and you … I would feel the same way. Its hard as the secondary income earner, kids, home, wife, mother … but women are strong and very resilient, so focus on your goals and it will all flow from there. Don't get bogged down in the nitty gritty, just focus on what you want and it will all come together.
Cheers
MichelleIf I was a mother of two children about to go out on my own then personally I would be looking to buy positive cash flow property.
With $100k, I would be looking to investing in 3-4 cheap ($70-$150k) properties that turned a positive cash flow. The thing is, as a soon to be single mother, any extra cash flow can certainly help.
The reason I like positive cash flow is that it funds your lifestyle WHILE you are achieving growth (and you can achieve growth). I can’t afford to pay for a property and hope it goes up, so I need as much income from the property as I can get.
If I was a single mum I would steer clear of negative cash flow just because of the negative effect it would have on living expenses, which could get tight after a divorce.
Ryan McLean | On Property
http://onproperty.com.au
Email MeBuying 3-4 properties worth 100K is financial suicide even if they are positive cash flow today.
Firstly at those prices financing them would be difficult and remember even property you buy irrespective of the yield will reduce your borrowing capacity.
Keep some of your funds back for contingency or maintainance, vacancy etc and divide the rest up and maybe look at 1 property initially to ensure you are confortable with the risk. Then after 3 -6 months if all is going weel look to add another property to your portfolio and grow slowly.
Last thing you want to do is blow the lot because the property looked cheap only to fund you have bought a complete lemon.
Just because the property is cheap doesnt mean it is a good buy.Richard Taylor | Australia's leading private lender
Thanks everyone…all opinions are greatly appreciated and I will consider anything and everything and weigh it all up…I do plan to take baby steps and take it slow…$100K is alot to blow and at the same time…not much at all. Keep all the ideas coming please…..
Yes, I totally agree with Richard
I would suggest you to consider 1 IP at any time…. it is a financial suicide to bet all the money in one type of asset.Have u consider term deposit with 1 year = 6.5% or Ubank At-call = 5.95%?
Please note that I am NOT qualified to give financial advice and above is just a suggestion
Hi,
I can soooo relate to you, i am a divroced mum of three children under ten, i have been divorced for three years (best three years of my life!) I have bought my PPOR and three IPS in this time. Admittedly I had a little more money, about $170K when i divorced, but I wasn't working and relocated 600 klms away from where I had been living to a large regional town where most of my family lived. My dad died last year, but my older brother and sister and their familes live here, so it's nice to have family support.
I now work full time as a teacher, so can have school holidays with my children and still earn an income that allows me to invest.
A couple of things to know and be aware of:Furniture – nearly all my furniture was bought at garage sales or on ebay, good solid furniture that is still going strong and as cheap as chips. Bulky items like lounges sell cheap on ebay, just need to be able to pick it up.
Moving away from ex – be reeeaally careful here you may run into trouble withe the child support agency as the ex may complain that he doesn' t have contact with the children. What are the custody arrangements? My ex professed to wanting to have 35% care of the children, however as soon as the divorce was through he moved 1200klm away with his 3rd wife!!! This meant that he had breached the parenting orders so I was free to move where I wanted to
If you are receiving government support you are entitled to rental assistance payments, but if you buy a PPOR then you don't get these payments. So you could rent and recieve financial support and still buy an IP.
if you want to talk please feel free to PM me or call me
cheers and good luck
Sonya
Hi oo3c.
I have been in the position of single parent, so can relate. I built my own home at 22 and it was a wonderful empowering experience that created a firm foundation for me and my son, not to mention the poor farmer I later married!!
I live in Adelaide myself, and as it was one option you considered, I can tell you there are nice coastal, southern and northern suburbs where you could purchase for under $300,000. Some as low as $200,000. My advice would be to put the money into a home for yourself, giving yourself a fresh start away from where you were. Target corner block properties that can be subdivided, which many can, just check each property with the council area concerned. For about $20,000 you can fully subdivide the rear block giving yourself a few great options. You could sell the block and reduce your mortgage, or invest the profits in another investment property. (From experience I have found these smaller blocks do not drastically reduce the value of the home, especially if you can beautify them yourself and tenants don't seem to mind them either.) You could also build on the back block, have a new home and sell the original house, or if you can, keep both as in effect your land was almost free, making it a great investment property as a new house obviously rents well and has lots of tax benefits.
Good luck with your new life.
GQlds007 wrote:Buying 3-4 properties worth 100K is financial suicide even if they are positive cash flow today.Firstly at those prices financing them would be difficult and remember even property you buy irrespective of the yield will reduce your borrowing capacity.
Keep some of your funds back for contingency or maintainance, vacancy etc and divide the rest up and maybe look at 1 property initially to ensure you are confortable with the risk. Then after 3 -6 months if all is going weel look to add another property to your portfolio and grow slowly.
Last thing you want to do is blow the lot because the property looked cheap only to fund you have bought a complete lemon.
Just because the property is cheap doesnt mean it is a good buy.grasshoper listen to wisdom
sonyasal wrote:Hi,I can soooo relate to you, i am a divroced mum of three children under ten, i have been divorced for three years (best three years of my life!) I have bought my PPOR and three IPS in this time. Admittedly I had a little more money, about $170K when i divorced, but I wasn't working and relocated 600 klms away from where I had been living to a large regional town where most of my family lived. My dad died last year, but my older brother and sister and their familes live here, so it's nice to have family support.
I now work full time as a teacher, so can have school holidays with my children and still earn an income that allows me to invest.
A couple of things to know and be aware of:Furniture – nearly all my furniture was bought at garage sales or on ebay, good solid furniture that is still going strong and as cheap as chips. Bulky items like lounges sell cheap on ebay, just need to be able to pick it up.
Moving away from ex – be reeeaally careful here you may run into trouble withe the child support agency as the ex may complain that he doesn' t have contact with the children. What are the custody arrangements? My ex professed to wanting to have 35% care of the children, however as soon as the divorce was through he moved 1200klm away with his 3rd wife!!! This meant that he had breached the parenting orders so I was free to move where I wanted to
If you are receiving government support you are entitled to rental assistance payments, but if you buy a PPOR then you don't get these payments. So you could rent and recieve financial support and still buy an IP.
if you want to talk please feel free to PM me or call me
cheers and good luck
Sonya
I agreed not to touch his super as long as I could relocate with the children…a friend told me I will have to rough it for a few years and buy everything second hand…not looking forward to this…what is PPOR? If I have IP's will the government stop giving me some sort of financial support…at the moment I get nothing from centrelink because i cant supply them with certain tax statements….not sure how long before I can give them what they want. I do family day care at home…so that I'm there for the children…if they get sick or on school holidays. I should be able to start up again if i relocate
Hi again.
PPOR is principle place of residence. (Your own home)
G
Oh sorry, forgot to say:
I believe what happens with Centrelink is that they view the rental from an investment as income, but at tax time when
you are able to show expenses/losses etc. they refund you. So you get a huge payment later in the year usually.G
If you relocate and choose to rent and buy ivestment properties you may not be able to do family day care, you would need to check with the landlord. I was a family day carer while i was doing my teaching degree via correspondence. When i fininshed this I initially worked in a long day care centre until I relocated, then I applied to teh department of Education to work in the schools, I worked part time for a term and was then asked to work as a temporary staff member on a full time basis, which I ahve now been doing for 20 months.
If you have experience working with children you may be able to get a position in a long day care or preschool if you are unable to have family day care at home. You may need to take leave if your children are sick, but if you get a position in a preschool you would still have school holidays. the other area of employment that many people don't think of is working as an aide in schools. this may be workign with a child who has autism, cerebral palsy or who is confined to a wheelchair. Again, this work is in school hours and I know that many of the people who work as aides in my school find teh work very rewarding and flexible.
Keep your options open as far as work goes, if moving to a large city there is also demand for nannies who work in the family's home so if you are renting this would mean that you don't need permission to run family day care from your home.
Sonya
Suggestions – replace upheaval and confusion with home safety and stablilty, giving youself time to decide longer term goals. It's risky to make long term decisions during periods of short term emotional turmoil and confusion.
Keep the job for now. You need stable income, work colleagues, something that doesn't change.
Stay near or in close touch with supportive family and friends. Establish an affordable home living within your means.
Get the head back together. Then plan ahead.
Least disruptive time to change schools is start of year 5 or 6, or start of high school.
If you have spare time, help out at the school canteen. Get counselling. Use support groups. Chat with local clergy.
Keep every dollar you can, it's strength and security, options and choices.
Invest in real estate when you have clear head and a clear plan.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
I'm cool…got my head on right…just the husband's stress sometimes becomes mine..because his bad at managing his stress. I try my best to stay relaxed and i dont dwell over negative things, just keep moving forward. I'm in no rush to buy yet…i'm looking at december…until the children get used of us two living apart, then relocate. Thanks everyone, your all very supportive and I really appreciate your time and opinion. Should I buy more properties at the bottom end of the market? Some middle or just 2 decent ones?
I'd buy the best you could afford … better rent return, hopefully better quality tenant. Just MHO.
Good to hear you're not getting carried away. Start with one IP and see how you go from there.
One idea would be to buy a property, but not live in it (ie put tenants in it). You could then rent elsewhere. The reason is that you would then enjoy some benefits which you would not enjoy if you lived in a place that you own.
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