Hi All – fist time poster!
So, having done the whole get married & raise kids thing time has come for us to focus efforts on ourselves :-) We are 12 years to “formal” retirement, with a goal to do it in 8-10.
We’ve sold the family home just outside the outer suburbs and bought a “fixer upper” closer to the CBD in what is referred to as Melbourne’s middle ring. Plan here is to use sweat equity to do a reno and modest extension and retain as PPR. We borrowed an extra $100K to kick off our real estate portfolio, and have it sitting in the offset account.
PPR is in both names, but he pays more tax than she earns so for tax reasons, plan is to purchase an IP in his name only, using the $100K for deposit, legals and fees (stamp duty etc).
But what to do?
Initial thought was to buy a unit around $500K close to public transport, shops and universities. Don’t want others to dictate our future so want to avoid an apartment and would prefer to avoid body corporates if possible.
Then we thought maybe a new house and land package in outer suburbs, minimsing fees and maintenance, though transport and vacancy rates are of concern.
Then we moved on to a house in a regional area, either one that’s commutable to Melbourne (e.g. Geelong, Ballarat) or a large country town (e.g. Bairnsdale, Shepparton).
Current thinking is maybe 2 units or a duplex-style property in a large regional centre.
Goal is to build a portfolio large enough that at retirement we can sell a portion to clear debt then live off income generated by remainder.
Interested in peoples thoughts, and the reasoning behind it.
Cheers,
Scott & Chris.You should let the goals dictate the strategy – so plan how many properties you intend to purchase and how to pay down the debt on them (either through cash flow via rent or job or capital gain via sales). Its a fairly short time frame over all so you don’t want to screw it up. Personally, if you are already heavy into Melbourne market perhaps consider somewhere else, but I would avoid tiny country towns as they are too risky for your life stage. Houses or duplex pairs could be an option but you need to balance cash flow with growth unless you are happy to just pay them off with your job income and then retire on the rents. Definitely avoid highrise units in Melbourne in areas of oversupply that will kill your retirement plans and I would also be very wary of house and land packages where there is unlimited supply of land too.
BuyersAgent | Precium
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Thanks for taking time out to reply.
I am only just embarking on the journey, so the way forward is somewhat hazy. I would think how many properties I intend to purchase depends upon how many I need to secure a reasonable income, what sort of properties they are and where they are located. I would also think that this would take quite some time to model…hello analysis paralysis!! Yes, I could go to an advisor/broker, but those I spoke to are not prepared to put skin in the game, i.e. their fees are not related to the success or otherwise of their advice.
“Heavy into Melbourne market” – Its where I live, and my only real estate holding, so does that qualify as heavy?
Finally, avoiding tiny towns would be obvious (low demand for property), hence the ones selected…Ballarat pop 95,000, Geelong 180,000 or Shepparton 30,000. Bairnsdale is small at 11,000 but was included as an emotive fave :-)
Cheers,
Scott
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