Hi,
I'm hoping some smart propert investors can help me.
I have $250K mortgage remaining on my $1M home in a nice part of Sydney.
I'm happy to downgrade a few suburbs to free up some dosh for investing.
Is this a smart thing to do..I am quiet happy living where I am, but just want to get rid of the mortgage so I dont have to spend my days working 2 jobs to pay it off.
I want to get into property investing and have the rental income fund my retirement in 10years.
Hoping someone can help,
FrancesSelling your existing home and buying a new one will incur agent fees, stamp duty, legals, discharge of mortgage fees etc – none of which will increase your net worth. Consider refinancing (package structured appropriately with a sizeable line of credit for deposits etc), then purchasing your IP(s).
Selling and buying will only chew up your capital, if you can live with your current mortgage (plus a little more to cover the IP's negative gearing) then you will be in a much better position than downgrading your own lifestyle. You could even consider buying an IP, renting your exisiting house and renting (for less than your mortgage).
I agree with IP freely i would sell but utilise the equity and use the extra cash flow to reduce the interest charged on your current non deductible home loan.
Look to gear against the current equity and then use the funds released as deposit for a couple of other IP's.
Richard Taylor | Australia's leading private lender
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