Hi All, Hope you guys are doing well under the new lockdown. We have been looking at a PPOR in Sydney for the last 6 months. We initially started at 950k and were ready to pay till 1.2 Million a month ago. A month ago we were bidding for a property that is a good 1.2 hours away from CBD(where we work) and we were the second-highest bidders at 1.25 Million. After I came back home, I released we would have spent 1.25 Million and still have to spend a good 1.2 hours(multiplied by 2) travelling 2-3 days per week. It is not just the financial stress of mortgage but also a lot less family time. Instead, I am thing of a new strategy, where I plan to borrow as little as possible for my PPOR i.e. Buy a Townhouse or a Villa that is closer to the city(30-45 mins). I initially thought of rent-vesting, but I don't want to put my family through another relocation just because the owner wants to sell the property, Plus I have a 4-year-old son(who will start school soon). Once I buy a PPOR, I plan to invest in places that may have better Capital gains and positive cash flow e.g. Brisbane etc. My wife and I earn well and we are good savers. Also, I have approx $150k locked up in property overseas, which I plan to sell once the overseas travel is resumed. I plan to buy 2-3 Investment properties spread over multiple cities to mitigate risk. I am looking at a 10-20 year horizon, so not looking for a quick buck.
It is great to see you thinking ahead. If it was me I would revisit the idea of rent-vesting. Although, you may have to move around every now and again and this can be quite painful it may serve you better financially long term. You would be able to start your investing journey now before the market takes off any further. With the house vs townhouse conundrum, when looking purely from a lifestyle perspective I would opt for a townhouse. Some people are happy to travel over an hour to work but for me, it would take a massive toll doing that day in day out. As you mentioned, it will also be a cheaper option so you could start investing sooner if you took this approach. I hope this helps.
Thank you so much for your reply. I was pretty serious about rentvesting and had already done the most difficult part i.e. Convincing my wife. Couple of weeks back, a family friend was forced to vacate their house. In that sense I am lucky, considering I have been staying in the same house for 3 years now. Atleast in the inner west where I stay, renting is definitely cheaper than buying.