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
Hopefully posting in the right area. Just wanting to detail my intentions so that I can then bathe in all the priceless professional advice found on this forum
IP A at approx $360,000 with $211,000 loan.
Current PPOR approx $480,000 with $389,000 loan and $105K in offset
My income is approx $100K gross pa and mrs wife is on $65K p.a
IP A practically costs me nothing to hold including rates, insurance etc.
With PPOR i expect rent of $360 to $380 a week which, with the current offset will cost me in the vacinity of $300 pcm to hold.
Now all my investment bones are telling me buy another IP around $450K rent it out and stay where I am as I will still have $2000 cash flow positive per month after meeting additional expenses on this 2nd IP.
But what I really would like to do is buy another PPOR and rent out my current PPOR. We are looking at $700K for a new home. This would leave me with approx +$400 pcm cash flow after all expenses i.e. car regos, bills, insurances....
Are we dreaming in terms of obtaining a loan of that much? At $700K 80% lvr means a deposit of $140k which is possible with my offset and equity. Is this correct?
Quality of living is maintained but whats scares me is the lower cash flow per month after expenses and dont know if this is quite acceptable or really digging a financial crisis pending hole for myself?
Any advice would be greatly appreciated.
Plantagenet said: ↑
But what I really would like to do is buy another PPOR and rent out my current PPOR. We are looking at $700K for a new home. This would leave me with approx +$400 pcm cash flow after all expenses i.e. car regos, bills, insurances....Click to expand...Hi
I think most brokers would be able to give you enough LOAN rope with some sensible lender selection, BUT 400 pcm is too dangerous for my liking ...........unless we can manage some risk
1. Job security is very strong, you have good insurances in place
2. That 400 pcm doesnt include any neg gearing benefits, so u can add an Income Tax Variation
3. if you think rates will shift upwards, then fixing a portion of the debt.
4. Obviously land lords insurance
5. You retain at least a cash buffer of around 50 k
6. Draw borrowings to the max level, and park savings against it, so that the extra lending presents further temporary buffer
Just some things that may help make it less risky
1. Job security is quite strong on both fronts and we are both insured to the hilt with CommInsure
2. No this does not include any benefit from neg gearing tax refunds.
3. This is always a nail bitter and a gamble either way. In the past I have always gone the variable option and ride the wave...hopefully all the way to the shore rather tan out at sea.
4. Land lord insurance is included in my calcs
5. Retaining a cash buffer of 50K...I am expecting to have this amount against my first IP after refinancing in an offset. Is this considered a cash buffer?
6. Little hazy hear. I mean to top up all my loans against each property to 80%. so I am expecting to have $77K from my first IP + $105K from PPOR offset. I would need $140K deposit on $700K to be under 80% leaving me with $45K in an offset. Is this what you meant here? Sorry if I am way off track.
I know the smart thing would be to stay put and acquire another IP around $450K. But gotta enjoy it all while we are still young.
Thanks for the valuable advice.