Buy a House in Sydney, Or pay out 2 IP's for cashflow but result in a lower deposit?

Hi All,
I'm keen on hearing what others would do if they were in my situation,

I have 2 Rental Units (one owing about 140,000 and the other about 400,000). One is positive geared and the other is just about neutral.
I also have an additional unit that I am living in that is going through a group sale to a developer and if all goes to plan I will have approx. 1.1 million left over after its mortgage is paid out due to the sale.

My goal is to buy a house in Sydney as this is where I live and work, however, would it be best to pay out my current Investment loans so I have the cashflow, but lose out on possible tax benefits.
Or use the 1.1 to put straight towards the house I really want to get.
Or another thing I was thinking was putting an extra 50-100 onto the higher Investment Loan to make it positive geared as well so I don't have to worry too much about making extra payments.

Or would it be better to only use say 850 of the 1.1 estimated amount from the sale and put it towards a house, and purchase a cheap investment in a rural town for 200 or so to try to have a bit more positive cash flow.

Could anyone recommend any good Financial Advisors in the Sydney area?
I would be more interested in paying for a professionals time and advise as opposed to handing my money over to them just to put it into shares/funds etc and I get stuck with their ongoing fees.

Thanks again.

 

Welcome to PC @Curious_About_Property

The possibilities / options are abundant for you after the sale of your PPOR.

If your priority is to buy your home in Sydney, if I were you, I won‘t pay down any principal in the 2 investments. And use the sale proceeds to pay down the new poor debt.

If you want to build an investment portfolio, again if I were you, I won't pay down any principal of the existing 2 IPs neither.

Try to keep cash in your own control as much as you can.

And re seeing a FP, what would you like to seek advice fro?

 

If you paid $1.1mil into investment properties and then borrowed to purchase the main residence then:
a) you would lose about $45,000 per year in tax deductions - which could mean $20,000 out of pocket per year for many years to come.
b) when you do buy more investment properties it could result in about $5,000 more in interest.

Why do you want a financial adviser? This doesn't involve financial advice.
What you need is a tax advisor and a finance broker.

 

Easy decision. Keep both IPs...unless theyre duds. Buy new PPOR.

 

Thanks All,
My goal is to buy a house to live in, between either Chatswood/Epping/North Ryde/Beecroft (somewhere near a train station as I work in the city) so its most likely that I will need to borrow at least another 500+ to get a house (Not interested in Town house or Unit).

While I am on a decent salary now, I was looking at doing a career change into something lower paying but something I will enjoy more so don't want to over mortgage my self.
So I was thinking if I get a loan for a house, and invest maybe 200K or so into something which will help generate some extra little bit of cashflow, then in the next few years that little extra cash will help with the bills so that I can afford to do what I want to do and not be stuck in a job that I simply do because of the money.

 

Good question, One is in Parramatta (owes about 140,000) entrance is off a side street but it does face a main road. So not to sure on value.
The other is in Top Ryde (owes about 400,000) - Opposite Top Ryde Library/Shopping centre so I think it would hold its value due to location convenience but again, not too sure.

I did speak to a member of St-George mortgages team a month or so back and was advised that due to my debt (regardless that I have put in extra 20 k in repayments) they would only be able to loan me about 150-200k due to the APRA tightening etc. which made me think if I knock down one or some of the loans I would have a better chance at getting a house.

 

ok thanks