Hi all
I am new to this forum I have been watching this site for a while and have found there is a wealth of information from experienced property investors and the not so experienced like myself. I thought I might as well jump in to seek some advice so here goes!
My partner currently has a PPOR in a place called Tannum Sands that she purchased in 2002 for $127,000 it has been rented out for the last 3 years, it is currently valued at $300,000 with a mortgage of $113,000. The rental income basically covers the mortgage repayments.
My partner is a Teacher and we are expecting our first child early next year she will receive maternity pay for that year of around $25,000
I earn around $90,000 per annum
We are trying to decide on what path to go down which are
1.) Purchase a second IP using equity from the PPOR and continue to rent
2.) Purchase a new PPOR to live in and sell original residence to lower the mortgage.
3.) Move back into original PPOR and pay off mortgage
Ideally I would like to keep investing to eventually be able to purchase the dream home although I am having trouble convincing my partner who would like a home now.
any advice given would be greatly appreciated
Thanks
Your plans will also depend on how much you have in savings, where you wish to buy and what price properties are. Also, does your partner intend to return to work, and what would be the time frame for that?
Are you currently paying an interest only loan or a principal and interest loan on her property? is the property in both names or her name only?
Just a few more things to consider when making your decision.
cheers
Sonyajuddy79 wrote:Hi all I am new to this forum I have been watching this site for a while and have found there is a wealth of information from experienced property investors and the not so experienced like myself. I thought I might as well jump in to seek some advice so here goes!
My partner currently has a PPOR in a place called Tannum Sands that she purchased in 2002 for $127,000 it has been rented out for the last 3 years, it is currently valued at $300,000 with a mortgage of $113,000. The rental income basically covers the mortgage repayments.
My partner is a Teacher and we are expecting our first child early next year she will receive maternity pay for that year of around $25,000 I earn around $90,000 per annum We are trying to decide on what path to go down which are
1.) Purchase a second IP using equity from the PPOR and continue to rentThink about the name on the title and loan as partner is going to be on lower wage during maternity.
This also depends on partner being happy with continue to rentjuddy79 wrote:2.) Purchase a new PPOR to live in and sell original residence to lower the mortgage.You will be required to pay capital gains tax on original residence if the capital value is more than when you started renting it out.
juddy79 wrote:3.) Move back into original PPOR and pay off mortgage Ideally I would like to keep investing to eventually be able to purchase the dream home although I am having trouble convincing my partner who would like a home now. any advice given would be greatly appreciated ThanksYou are going to experience increased costs to your living with a baby.
If you move into PPOR you lose a reliable tenant
IF you pay off the PPOR you could concentrate on doing this while your partner is on the lower income.
This would put you in a better financial position by reducing non tax deductible debt if you decide to stay in this property.
Then when your partner starts work again you can afford to invest in investment properties and have more equity in PPOR.I can't tell you which way to decide but I have put forward the pros and cons of each choice.
The title and loan are only in her name and it is still a PI loan ,we have around $40,000 in savings also if we were to buy the next IP it would ideally be no more than $300,000 we are still looking at locations. My partner will go back to work although part time in around 12-18 months.
Thankyou for your comments it gives a few things to consider.you should look around at child care costs and get an idea if you intend for your wife to go back to work. Someone who worked in my place earns approx $35k and she said it almost break even with child care costs… so she lefted work to be a stay at home mum instead.
i think the best move right now is to put ur money into other investment like shares and pay of your PPOR first.
Re the childcare issue, might be wise to consider living near family members that are retired and have a burning desire to do lots of daytime babysitting!
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
re the childcare there are the retired family members who definitely have the burning desire to take care of any babysitting duties. I should mention Tannum Sands is 20min out of Gladstone we are moving back there because of work re LNG infrastructure and also free babysitting. cheers!
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