Hello everyone,
My name is Grant & i live just outside Wollongong NSW. Im only a pup when it comes to investing, but im doin my best to learn as much as i can.
Im looking for some advice, as me and my girlfriend would like to move to a location which we cant afford to buy in atm(Wollongong). We currently live in our PPOR which we owe 310k n its worth around 360-370k but needs alot of work.
We are thinking of renting in Wollongong and renting our place out for around $350 p/w.
Im very curious to hear peoples opinions on options we have. The house we own atm, we do not want to live in again, so should we keep it as an IP, or sell and move on.
Our combined wages atm is only 90k but in 2 yrs time it will be around 160k, as we are still both cadets.
Any ideas or things to think about would be really appreciated.
Thanks
Keeping it as an IP can be a good option – particularly if you feel that you could add some value to it in the future.
Can you afford to keep it as an IP? Based on the numbers above it will be negatively geared to the tune of $100 – $150 per week. This won't be too much of a burden once your incomes increase.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Coxy86,
One question I would ask is as you mention that you are cadets, does that mean you are with the Navy (of defence forces) by any chance? If so, is your current PPOR finance done under one of the DHOAS home loans? Depending on this, it would factor into how you could perhaps take advantage of this before rushing into a sell or hold decision – won't go into any other details with that without conifrmation, but in the (recent) past I have had a lot of experience with these DVA subsidised loans.
If not the case, it may be a good idea to sell, to assist with funding the next place – or if you genuinely believe (perhaps talk to some in the area) that you may enjoy some capital growth over the next couple of years, without spending big $ on repairs, while it would be neg geared, may be a good idea to hang onto it and rent as you mentioned.All the best.
What are the chances of you making a good enough profit to be worth renovating it, sell and then have a whole lot extra for your place in Wollongong? The PropertySystems kit is pretty good for helping with costing and all that and can be a good way to may quick cash, as well as the benefits of selling your PPOR to avoid capital gains tax.
If looking at it from a purely money perpspective then renting in Wollongong will be the better option for you and either keep your current place or reno and sell and get a couple of other places to start building your portfolio. But sometimes its nice to live in your own place. One trap people fall into though is buying their dream home too early and then being stuck in debt, unable to continue investing. Better to invest smartly in what you can afford and then in a few years you'll be in a much better position to buy in Wollongong, provided all goes well. I am quite an amatuer myself though, but these are just a few thoughts from someone who has gotten 3 properties so far by not buying the big one first up, and now if I chose could.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
