在澳大利亚 The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m
This is my first post. I am wandering if what I would like to do is a smart move or not.
Due to events in the past my DH and I have not been in a position to invest. We lived in Sydney and had a mortgage on the house we lived in there. We are now living in Regional NSW, renting and pay $375 per week in rent for a very nice place (mortgage payments for same type property will be well over $600 per week).
Anyway, we have sold our property in Sydney and will net approx $60k in our hand after fees etc. I see we have 4 options available to us:
1. Pay off our remaining debt which means we will be debt free except for my husbands car.
2. Keep in the bank.
3. Buy small investment property
4. Use money to buy another property where we live now and stop renting.
Now the idea of being debt free (ie: car loans etc) is enticing. BUT I have found a few small investment properties which are positive geared. One is around 60k and rent income of $120 per week and the other is around $80k with rent of $150-$180 per week. They could do with cosmetic updating but could be rented in current state because they seem in good condition. Area is a little undesirable from what i have been told but rental market is somewhat strong without too much of an issue of unpaid rent or damaged properties or so I have been told. Pretty much like any area could be.
Capital gains would be minimal on investment property I know. To date I haven't found anything that I would want to purchase to live in within my price range that I like.
I am leaning toward one of the cheaper investment properties and let it pay itself off. This means that I will only need say $20k of the money I am getting and I can still pay down a big chunk of debt.
I am in my early 30's, have a 3.5 yr child and earn over $100k p.a but it is mostly commission based so it not reliable if you know what I mean. DH looks after my child fulltime and doesn't work.
Any thoughts would be much appreciated.
Pay off all your bad debt.
Don't buy a property that has little chance of capital growth even if it is positive geared. (You'd get a better return on interest on a term deposit without tenant hassles and maintenance issues)
Get DH back to full time employment.
Agreed about the bad debt thing.... and I have been thinking that all the way through until a couple of days ago.
One loan is at 8.2%, another which I wouldn't pay off is at 9% and only has 2 years to run. This would net me about $20k which is what I am thinking about using for IP.
With more clarified info, does this change the opinion?
mins said: ↑
One loan is at 8.2%, another which I wouldn't pay off is at 9% and only has 2 years to run. This would net me about $20k which is what I am thinking about using for IP.I don't see the point in buying a cf+ve IP with no/little CG - so you are purely looking at yield of what? 8-9% out of which you have to pay rates, insurances etc etc. and have to put up with tenants.
With more clarified info, does this change the opinion?Click to expand...
You'd actually be in front if you paid off your 8.2% & 9% loans.
If you don't believe me, see an accountant for advice. See one anyway
Pay off the bad debt and then save for a deposit on IP 1. Bad debt is so unnecessary and the sooner you can pay that off the better. Investment mortgages are good debts and you want them....take your time and look around. There are polenty of great places with good rental income and CG....just take the time to search them out.