Do you feel like the bank owns you?

This always interests me. He made his money in property, used to be an agent I believe. We went to his office once for advice, and were advised not to get into more property.

I'm not saying the advice wasn't good, but it wasn't advice that suited our style or risk factor. I'm glad we did our own thing. Now that we have more money (thanks to property), we are looking at reducing our bank debt and putting more into shares and/or into superannuation. That lessens the impost of maintenance, rates, utilities, land tax etc, but without property, we wouldn't be where we are.

So, I look at the bank as a "necessary evil". I don't feel like they own me. I feel like I'm paying them to get us where we want to be.

 

We've just sold one property shared with another family member so I've placed proceeds off one loan and into offset against another. This gives us better cashflow, but keeps cash available for our DA. First job is to lift and shift a house off the proposed building envelope.

So debt is reduced temporarily until we draw back on those loans to continue our journey.

We will either do the minimum required to clear the building envelope (lift and shift) and continue to rent, or do a bigger job (lift, shift, build down to turn a 3x1 into a 4x2). If we do the bigger job, we will likely then sell. Extra rental return for just the lift and shift will be "zero". It will cost us approx $100k to get the house ready to rent again with nothing changed except position on the block.

I'm estimating about $250/300k to change a 3x1 to a 4x2 if we do the bigger job (lift, shift, build under). The extra rental return for that bigger job will likely not provide enough return on the total cost.

So, lift, shift renovate and improve possibly will return enough to recoup the money spent making it a better house.

I have a bit of homework to do, but for now, with rents fairly flat, we will leave current tenants in place. We are getting more rent now than if we were trying to find tenants..