After some initial advice regarding buying a new PPOR. Currently have an IP and PPOR. My wife and I have just started looking at properties (not seriously yet).
Typically the price range for the properties we are looking at would be much more affordable/achievable if we sold both the PPOR and the IP and put the money towards the new PPOR. It would be a real stretch if we only sold our current PPOR.
I don't want to part with the IP as I see it as a future for further IP purchases from the equity which I want to do in the nearish future. I'd have at least $100K in equity for the IP, but i see it as throwing away a perfect opportunity for setting us up financially.
I feel that once my IP is sold it would be very difficult financially to get another.
Has anyone been in a similar situation or have some advice?
I had the same contemplation.
I decided that there is no way I am selling IP. I have 2 choices…………..
1 – downgrade expectations on new PPOR
2 – wait till I can afford it later.
I have chosen option 2. The way I can achieve the goal is by manufacturing some equity. To do this I am going to buy 2 more IP's that are undervalued, renovate them, rent them. Then when the time is right I can sell PPOR and 1 or 2 IPs to fund new PPOR. I still have 1 IP left. Then I will start the accumulation phase again.
Well this is my strategy – time will tell if it works. It means 3-5 years delay in getting my ride on mower
(I am buying acreage).Good luck with your journey.
I don't see a major problem with selling the lot and setting yourself up with a new PPOR – should mean your debt level would be lower.
There are occasions when people upgrade their own home and therefore increase their share of non-deductible debt. This continues to act as a handbrake on forward investment momentum.
Key issue for me is if you sell the lot will your debt levels be lower/higher/similar?
And second to that – does your overall equity position decrease/increase/remain similar?
Your post mentions you have equity in your IP at the moment and that you would be reluctant to give this up – it is possible that, with careful selection and sound decision making, your equity remains intact and can still be used to continue your investing.
Having said all of that – buying and selling real estate does incur signifcant costs and this will need to be factored into any decision you make.
Yes, I'd be wary too about the significant costs about selling your IP and PPOR, and then the buying costs to get a new PPOR. You should really think about whether it's worth upgrading your PPOR and consider your goals.
You may find that the return is not worth it, especially since you'll give up your IP
Our basic reason for wanting a new PPOR is we've recently had our first child and are thinking of something with a yard etc. We live in a townhouse now, so realistically won't NEED a proper roomy yard for at least a year or two.
I like ShellT's idea, it's similar to what I'm considering. Looking at Cherie Barber's course and contemplating going down the reno route to buy, fix and sell for some faster returns. But just the cost of the course is what has me most concerned if I'd be getting my monies worth. It's a big outlay.
(I am buying acreage).
You must be logged in to reply to this topic. If you don't have an account, you can register here.
