I bought an ordinary 1bdrm apartment <10km from Sydney CBD a year ago for 500k. Second half of this year most will be paid off and I would like to get a second property. Problem is that I don't want to pay off a 500k loan. I would prefer something around 350k, and I doubt I can get anything in Sydney for that. The purpose would be 1. Primarily investment. No plan to sell any time soon, but I would like it to have reasonable potential for capital growth in case one day I do, which rules out getting a place way out in the sticks. Something within say 15-ish km from a CBD of a major city would likely be a necessity due to ensure it has some demand in both rent and appreciation. 2. An option to stop renting it out and go and live there is also important. Is it possible to get an apartment for around 350k that is actually a worthwhile investment that is in an area that has enough demand to find renters and if I ever want to find a buyer and sell it? Any thoughts on where would be appreciated. Second question is - ideally I would find a company who can help give advice on this, but I am concerned about paying a company to help me with this due to the conflict of interest - which is that it is in their interest to convince me to buy ANYTHING just so they can get their commission, which could leave me with bad advice that costs me a fortune. If you have any thoughts on how to go about finding an advisor and how you could have any level of confidence they were not serving their purpose at your expense, that would be great.
You might want to consider other states. How important is it that you have the option to live in your next investment?
Yes I am happy to buy (and eventually live) in another state, as long as it the property is close enough to a CBD so that the demand maintains worthwhile rent and value increase.
If you want to stay with Sydney then consider an older 2brm unit in Liverpool. Check recent referees and track record before engaging a BA or advisor.
Just a question, are you paying off the loans? If so, I'd suggest stop doing that and get yourself an offset account asap. Because if you decide to buy a separate home using money you have in your IP as your PPOR/main residence, that money you redraw will not be tax deductible.
Thanks for the reply. Hmm I am concerned that Liverpool being so far from the CBD that demand for both rent (and future re-sale) will not make this a worthwhile investment. I am thinking that Sydney is just not a viable option and wondering if within 15-ish km from a CBD in other major cities would have apartments in the 350k range can be found. Regarding BA - Do you get referees from the BA directly? They would only offer the happy clients, which would really not solve the problem of confidence in them. Or are there other ways to get this info? Cheers for the reply by the way.
Yeah everything is in an offset so far. Oh. So in the new apartment, I might be better off not consolidating the loans? Eg: Property 1 - loan 200k, offset 150k, Owing 50k Property 2 - loan 350k, offset 150k, Owing 200k if I then go to live in #2, the interest for owed amount that property is not tax deductible, so in that case I would move the 150k from #1 into #2 to maximise the amount owed on property 1 to get the maximum tax deduction? so I can not do this if I consolidate the loans? say if I had that in one loan of 550k and had 250k in the offset - I could not just claim the interest from the 300k owing as tax deductions on the investment property?
General rule: never cross your loans. Always keep them separate and stand alone. It's clean and is ideal if you ever want to pull out equity or sell anything. This sounds perfect.
Wow I would never in a million years have known about this. You have probably just saved me a small fortune. Thank you.
No worries. Lots of things to learn... sometimes people assume others know things but they don't so sometimes things need to be said, however basic. I didn't know the difference between a redraw and an offset till it was too late....
