Advice Needed!

Hi. I have just paid off my PPOR (a 3BR 500sqm land) in Altona Meadows (Valued at 450k approx. No growth at all).
I have a son who is turning 5 and will start school in 2017. My wife and I have decided to buy a new house in an area with good schools and not too far from city (work) plus good potential for future capital growth. Budget 700-900K. Which areas should I be looking at?
Also Should I keep my current house or sell that & buy an IP somewhere else? Any advice would be greatly appreciated!

 

Selling might be a good option as the house is now paid off and any equity will not be tax deductible plus will cost you interest repayments to access the equity.

 

By the time you sell (assuming no growth) you will be close to making a loss after all costs are tallied?

Another option is to keep the PPoR as a very pos geared rental, find a place to rent near work, and save for a deposit on a new house, then get another new loan for the new house.

Your "footprint" is now doubled, and accelerating the wealth faster.

The rent from the existing PPoR will offset a lot of the new rent you might have to pay and then the new future loan repayments on the new PPoR once you move in.

We have a similar conumdrum; we have a fully paid off IP which is enormously pos geared now, but have recently bought a future PPoR site which will need a knock down and rebuild (currently tenanted) and we are renting ourselves..would not qualify for a rebuld loan right now, so have elected to rent for 2 years and smash the existing PPoR loan (with the help of the rent from it). Reuild, and then move in....we could move in right away and pay no rent at all, but then we have to move out again for at least 6 months while the house is being rebuilt.

Do we sell the IP to fund the new build, or keep the IP and borrow for the build?
It's a bit swings and roundabouts, and if you sell, you lose the future growth from the existing IP.

Consider keeping the PPoR as a rental, and crunch the numbers a bit.

 

How could you have had zero growth? I live near the area and have seen prices rise. Did you overpay?

 

Prices in AM have risen by at least 9% over the past year. The area tends to play catch up at the tail end of a growth period. The same situation occurred in 2010.

East West, if your place has two bathrooms and a garage it should be worth around $500,000. Perhaps re-check its value.

 

You might want to also post in Property Finance and ask a broker who is knowledgeable about the areas you're interested. Look at the options on what to do with your current home, how much equity you could pull out, consider risks and future goals etc.
I believe @MsAli is into mortgage broking too

 

@Jingo spot on. Altona meadows is always one of the last suburbs to see growth. Same thing for laverton.

 

Hi...
My place only has one bathroom and a car port.

 

How many bedrooms?

 

Thank you very much for the replies! Any suggestions on which areas I should look at for buying? Most of my friends have suggested the east (Burwood East, Blackburn South area)? I am very confused. My priority is for good public schools for my son.

 

3Br. Weatherboard but rendered.

 

Coincidentally I just wrote about 11 strategies you could use when moving from a paid off PPOR to a new PPOR for which you have to borrow:

Strategy: 11 Strategies for when you move out of the PPOR and keep it

 

Sorry I meant to say minimal growth compared to other areas. Do you think it would be a good idea to hold long term or sell out and say buy in Places likePC/Tarneit?

 

I would hold on to the property for now. Is their a way you could convert the carport into a lockable garage?

 

Thank you. A bit difficult I would say but I might consider it if it might add decent amount in the price of the property. I am leaning towards holding it as well.

 

Depending whereabouts you home is closer inwards to princess freeway towards truganina laverton or to the esplanade which in altona is prime real estate as you have those beach side ocean views, i would hold it. Altona is already getting expensive as it is next up from williamstown and you can only reasonably assume that altona meadows may follow. 500sqm nowadays is still hard to come by in this market within distance to the CBD.

not sure why other poster said if you drawn equity to buy an IP with the sole purpose to buy an IP as a rental it is not deductible, doesn't seem right as i have done this before many years ago.

 

I have posted before and am somewhat biased but I still maintain Melbournes North West is the most undervalued real estate in Melbourne.
For your budget you could buy in Niddrie, Airport West, Essenson North/West.

As far as schooling goes they are zoned to some of the best in the state.

 

What schools are they?

 

I was more referring to high schools but appreciate the poster has a young one.

For high school though there are a number of great private options;

St Bernard's
Penleigh and Essendon Grammar
St Columbus
Ave Maria
Lava Hall