VIC 450k budget for IP or home

Hi

I am looking for some advice here. I have a 2br unit in Essendon as my primary home. But due to family need, I am seeking a house having more space. I consider Essendon unit is still good to keep for value, then my remaining borrowing capability will only allow me have lower in range of $400-500k budget for next one. After searching, it is hard to find 2-3+ br house even unit in similar location or suburb as Essendon. The affordable areas for house are mostly more than 30km from CBD. From early stage of research, I found area like Doreen, Wallert, Werribee or Plumpton. Not sure land and home package is good to go with. Sounds not cheap and taking long time and effort before settlement.

Still would like to get a property to invest rather than leaving deposit in bank for little interest if possible. I think alternative option is keeping staying at Essendon or rent out both and rent somewhere more suitable for our own needs.

I hope my thoughts sound reasonable as fresh investor. Welcome to any advice and suggestion.

 

Hi

You can opt for areas like Wollert, Epping, Mernda etcetera. However, these areas have grown and you would be lucky to source something in your price range.
You cannot save much in land, unless you can find land and make a cracking deal. Hoowever, try to save as much as you can in the build.

if you are comfortable renting a house, you can invest in geelong as well which will give you good cashflow and immediate equity with 5 to 8 year of timeframe for investment in mind.

Regards

 

Sell the unit CGT free and use the proceeds plus your $450k to buy a townhouse in Essendon. Lifestyle is important and (assuming you are close to work now, kids in good Schools nearby) best to maintain that if possible.

Of course there are transaction costs involved but you will save in future given you will have a larger CGT-free asset.

 

Thank you. I was thinking about that. Unfortunately, townhouse is not the type fitting our family needs unless there is shower and bedroom at ground floor. School is one of the reasons for keeping this Essendon unit. Maybe I need to give up and keep money in bank. Hope pricing is not going to faster than my earnings..

 

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Yes, I realise there is not too much available in these area for my low budget. The starting price of land and house package is getting higher. Have not researched too much about these packages, but hear that people usually go over the basic package for basic needs.

Try to stay in metropolitan area. But will do some research about Geelong as another option.

Thank you for the advice.

 

That is possible.

105B McPherson Street Essendon Vic 3040 - Townhouse for Sale #126493286 - realestate.com.au

Think really hard before you move out of a good suburb like that. You obviously have the means to stay there if you sell the unit, and you risk being priced out in the future.

 

Yes, so true. It makes decision making harder. If I sell my current home, I guess I won't have such high budget because of no rental income to boost borrowing power. Need to ask my broker, think and search harder.

 

Buy a property in a newer estate(wollert/werribee) and rent out both properties then rent a place for you to stay in the location you like.

I was considering the same when my wife was working in the city and out PPOR was in Berwick. Renting the PPOR and renting closer the city had better tax gains through depreciation for me. But it depends on your circumstances.