Couple Looking For Ideas/Guidance [Sydney]

Hi,

Part-time lurker, first-time poster. I'm overwhelmed by the wealth of information here, and thought I'd ask to see what people would recommend in our position.

Our position being as follows;

• Engaged, no kids (likely not for 3+ years), looking for PPOR
• Earning $100k (+10k bonus), partner has own business and brings in $50k
• I have $60k in savings
• Partner has a positive IP (similar properties in the area are worth ~$500k). There is ~$150k owing, renting for $400/wk, repayments at $1400/month. Not really a place that we'd want to move in to.

Various online calculators are telling us we can borrow in the ballpark of $800k to $1m, but we are looking to meet with a broker this week to get a clearer idea.

We'd like something with 2+ bedrooms, and whilst preferring a house we are finding that we'd be having to look quite far west (Blacktown area, Marsden Park etc) to achieve this. So, we're open to unit living (in areas like Gladesville, Lane Cove, Pyrmont etc). We'd like to be within 30-45 mins from the CBD if at all possible.

What would you do in this position?

 

Hi @Kriseline

Where do you think Sydney sits in the property cycle if 6 was the bottom and 12 the peak?

Have you considered the big picture as to what sort of a portfolio you want? In 1 year, 2 years, 5 years? What would you like the portfolio to be ans what brings you to investing in property?

Focus on the whole portfolio...not just the immediate 800k spend. Also, ensure you ask the broker to work out your entire spend and hence how many properties you need to buy in your risk profile to match that.

 

Hi MsAli,

Thanks for your response.

Where do I think Sydney sits? I don't know, any time I think things might be about to slow down, they don't.

The big picture for us is that whilst we'd like to add more IPs in a further 3-5 years time, the priority right now is a place to live.

 

Understand. Makes sense if it's PPOR. Sydney is still competitive but if you know your market, know exactly what you want, build rapport with the agents, its possible.

Have you considered townhouses or villas in Wentworthville..35 min by train to the city. I haven't looked recently, however 650k to 700k should get a 2br villa...800k should get something better, though unlikely a house.

 

Hi @Kriseline, Since you mentioned Gladesville, Drummoyne (or perhaps Meadowbank) is nice if you can snag a water view! That will hold its value/outperform as long as the building has no issues and the strata is ok. Not sure if your budget allows.

Otherwise, this is a really good option that's currently on the market if I was looking for a new PPOR... it has an "X" factor
33/11a Betts St Parramatta.
Do up the inside. I like this location too. Its quiet and the surrounding units are nice.
You may be able to buy it for 735k. Its a 3/1/1. Strata rates are very reasonable. You can't do anything with the exterior really but I rate it... and you could run a home business from it too.

Ps. Dont pay any more of the IP off...

 

This is a property investment forum, so umm hate to say there is often a 'conflict of interest' between owning and building wealth through investing in residential property.

Have you explored continuing to rent while investing in more properties. Why the priority of a PPOR?

 

In your situation you have to approach this as an investment decision - if you spend $1M on basically a lifestyle decision you will most likely spend the next 15+ years paying for it.

You need to be creative about making it work as a investment - this is likely to involve getting something with "potential" rather than something that has it all now. The potential will relate to both the location and the property.

It has too happen now as there is limited time before family and other concerns play a much bigger role in your decisions.

 

Hi @Kriseline,

The simple fact is your PPOR purchase will also affect your investment options/decisions moving forward. In my opinion the best way to frame your PPOR buying decision if you know you want to keep investing to build wealth, is to frame that decision in conjunction with your investment goals, as they definitely affect each other. I would take preliminary advice from the forum and then meet up with someone who has also built wealth from property for an indepth discussion of pros and cons.

My 2 cents.

 

I would be speaking to a decent banker or broker asap.

Find out exactly how much you can borrow, what deposit you need, what the costs (inc LMI) will be and get them to provide reports on properties you're interested in.

Also need to look at this straight away.
You're currently paying ~$1,400 p/m into an investment loan that you have no intention of living in, no benefit in paying down this loan.
Could be paying interest only ~$600 p/m and saving $800 p/m in an offset account.
Would still reduce the interest exactly the same, but allow you to preserve the $800+ each month for your PPOR purchase.

 

Went to edit but didn't allow so another post sorry :|

Although you're looking at a PPOR which is your prime focus now. A decent banker/broker will take into account your future considerations.

• Engaged, no kids (likely not for 3+ years), looking for PPOR
• We'd like something with 2+ bedrooms, and whilst preferring a house we are finding that we'd be having to look quite far west (Blacktown area, Marsden Park etc) to achieve this

The residential property you purchase now, will you upgrade it to the house you want in the future?
Potentially when you have a child or two in 3+ years?
Will you keep the existing property?
Would you be reducing the balance of this loan?