Hi all, looking for some help.
I have an investment property that I would like some thoughts on.
My wife and I are looking to buy a house as we are expecting our first child this year.The Investment property has an approximate value of $290-$300,000. Mortgage is approx $130,000
Our PPOR is a 2 br villa unit. Worth approximate $450,000, mortgage about $390,00.
At this stage we are looking to sell the investment property and then our villa as we are looking to buy a house worth between $550-$600,000 and I don’t know that it would be possible to do so and keep our investment.
We have a combined income of around $160,000 a year.
Any thoughts would be appreciated.Thanks
Hi Lukey
Congrats on the pending arrival – I'm in the same boat, ours is due in April – it's an exciting time!
I'd consider a few things.
Firstly, are the two properties going to make good investments in the longer term? Are there any growth drivers in the area that will see them perform?
Will your combined income be $160k after bub arrives or will it drop as your partner takes some time off work? If so, I'd base any workings on the lower income.
If you think the properties will do well over time and feel that you'll be able to service all debts – then I personally would look to hold (especially given the current state of most markets at present).
It looks like you have enough equity up your sleeve to keep the IPs and purchase a new PPOR. But again, you don't want to do this at the risk of struggling to meet your liabilities.
Best to get a professional to do some number crunching for you and discuss your options.
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]
I agree with what Jamie said… if you can hold onto them without causing yourself grief, that'd be the go.
Why not give Jamie a buzz and ask him to crunch the numbers for you.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Well first congratulations !
Secondly, i would suggest to work out some numbers and if you would be able to pay off both for your new home and your investment properties after having baby then definetly keep them, else i would suggest to mortgage one of it.
Having kids is a great thing and will change your life for the better
The only comment I would add would be is your investment property in a strong growth area. Just keeping a property because you can should not be the only reason
Nigel Kibel | Property Know How
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Thanks for the replies. The main reason we are looking to sell is that we don’t think the bank will give us a loan if we still have $130,000 owing on our IP if we chose to keep it. Not entirely sure how equity works but don’t know if the bank would be willing to give us a loan of $500-550,000 or even if we could comfortably pay it after having a baby.
Basically we want to spend $550-$600,000 on a house. Selling both properties will hopefully allow us to have a mortgage of no more than $400,000. Selling the villa and trying to keep the apartment might be tougher as it will involve borrowing more money than we already have now. I would really like to keep it but I think for the sake of having a bigger place, selling could be the go. It’s a one bedroom apartment and it’s slightly positively geared.
Thanks for the replies. The main reason we are looking to sell is that we don’t think the bank will give us a loan if we still have $130,000 owing on our IP if we chose to keep it. Not entirely sure how equity works but don’t know if the bank would be willing to give us a loan of $500-550,000 or even if we could comfortably pay it after having a baby.
Basically we want to spend $550-$600,000 on a house. Selling both properties will hopefully allow us to have a mortgage of no more than $400,000. Selling the villa and trying to keep the apartment might be tougher as it will involve borrowing more money than we already have now. I would really like to keep it but I think for the sake of having a bigger place, selling could be the go. It’s a one bedroom apartment and it’s slightly positively geared.
Hi Lukey
A good mortgage broker will be able to look at the numbers and determine what the bank would say, even before you submit an application. That's one of the very nice things about brokers
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi Lukey
If the main reason for selling up is doubt that the bank will front up with the funds for a new PPOR then definitely consult a decent finance person. If you're comfortable with using email/phone, you can choose your broker from anywhere in the country.
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]
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