Hi guys,
I am quite keen into property investing as a gatherer of knowledge. I looked into buying an IP property, then when the market went flat looked into development in regional Vic, and now have a 3rd baby on the way so two incomes goes down to one….. development ideas out the window…..
Anyways enough about the past lets look forward….Currently in a 3 bedroom house with a 310K mortgage approx value 400k and have a 20k line of credit and 25k in an offset account.
Now we are looking to get a new 4 bed house and I originally thought about 400-500k and then struggle for the first year but wife goes back to work, kids go to school /day care and life goes on….
BUT…..
I found a property that is approx 1050 sm and 700k and in an area on the 20km belt of Melbourne with 4-5 bedrooms and potential sub division… to either tomahawk the back or plans/permits for 5/6 units
Now if I kept the PPOR there is no way I could afford this other property, however if I turn PPOR into IP and then buy a 400-500k house will I be better off or not……
I hope I have made sence, but basically asking is the dreaded option of selling your PPOR for a bigger and better PPOR with development potential better than keeping your PPOR and turning it into a IP and buying again…..
Cheers for reading and thanks in advance for any replies!!
my advice is go visit potential lender of extra required loan to buy any future additional properties and find out what you can borrow.
Serviceability may be an issue on one wage
You may have to wait till your wife is working again.Also another very important consideration is can the property in question be subdivided as new rules have come in on protecting certain suburb areas from losing backyards to development.
Hi Mick
The first you thing you need to do is look at your own household budget and ensure that you can actually afford what you're proposing to do first.
If you've worked out that you can actually afford it – I'd then speak with someone who has access to more than one lender who will be able to run some scenarios and work out whether it's feasible from a borrowing capacity point of view.
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]
Thanks for the reply guys,
Servicing the loan will be tough but not impossible for the first year, then two wages and back into the swing….
I will be doing something in the next few months either buying a 4 bedroom house and keeping the current 3 bedroom home as IP, or selling the 3 bedroom home and upgrading the family Home.
Also locked into a fixed rate with ANZ break free with 2 years to run…..
If servicing is tight, I’d be hesitant dealing directly with ANZ.
Their servicing calculator is one of the least generous out there so while what you’re aiming to achieve might be possible using a mix of lenders, it may not be possible solely with ANZ.
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]
Thanks Jamie,
At the moment we have great serviceability, as two incomes (170k+) and a 310K loan. It’s what’s going to happen in 7 months when we go back onto one wage….
I was thinking I may be stuck with ANZ (worse things could happen) as I have locked in 150k with two years to run on it the break costs would be huge….
Yep, sticking with ANZ for your current loan is likely to be the best option.
It's hard to comment whether sticking with them for the next is the best option based on the limited info available.
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 Jamie,
What other information would you like?Also your opinion on weather we keep our current home and buy a modest 4 bedroom house(around 400-500k). Or Sell our home and move into a bigger and better place (around 660K) your opinion would be valued.
Cheers
Mick
Hi Mick
Feel free to email me and I can run some scenarios for you.
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]
Mick, this sounds all well and good.
The question I have is about YOU. Do you want to move? Ok so you want a bigger house to accommodate a new baby. And there is always the nesting thing. How many mums have I known – or how many mums to be did I see at opens.
To do something like this is a big thing to do- while involving the family. Like do you want to be living in a construction zone while this is going on?
Is the house you have found near to where you live? Will you be moving far? How does your partner feel about all of this?
Having done this before – it is a great strain on the marriage – and now I am single.
Property investing is a great way to build a retirement income of course – but is it right for your family just now?Great comments "womeninproperty", i too have had things fall apart chasing the elusive $$$$$$$$$$$,so can relate to this.Mick,slow and steady mate,dont put yourself under the pump if you dont need too,wait till you are 100% sure it will not financially stress you out.
Not sure in your council but a trap for young players,in SA.Councils break up their areas into "zones",the development plan will allow sub division in some zones,but not others.This way they can review the zones they want developed when it suites them,or when supply versus demand starts to fall.And I dont know what is going on with the changes to planning in Victoria. I dont know what impact this is going to have.
I would be very cautious at this stage going into something for “development” purpose until I understand more of how this is going to pan out.
Hence the reason for my next meeting focussing on this issue.But really again I say – what do you and your partner want to do? Yes, you can make the $$$ but do you want to live in a construction zone?
As I always say – that you dont hear from real estate agents – there is always another “deal” around the corner. This will not be the last one on earth.
I hope by now you have had some constructive numbers feedback from the finance guys on this forum – figures always help me to see the “big picture”…………
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