What’s the best way through this? We currently reside in employment supplied accomodation for $50 per F/night. We are considering a move from here for our well-being (things have gone a bit sour), although our employment is good and secure and will remain the same (no issues with employment at all). We own a 3 bedroom property which is rented to our pensioner mum for $100 per week. Market rent for this property is $400 per week which would cover the $289k mortgage (we would still be negatively geared as far as rates etc is concerned). We have owned this property for 18 months (capital gains tax is not a concern). The property was built in 2016 and so depreciation should be decent. We are considering building a 4 bedroom house with 2 bedroom granny flat (under same roof, seperate entrance) for $685k (house and land). The plan would be to rent the granny flat to mum for $100 per week, we move into the 4 bedroom side of the home and rent our other property for the market rent of $400 per week. We plan to put mum on a lease and claim the depreciation of the granny flat. Alternatively we could build the new property and rent it out for approximately $600-$650 per week. Leave mum and us with our current arrangements for 5 years and save over $100k on the mortgage of the new build with extra payments. (This of course would mean having to stay in our unhappy home for financial gain and have our new family home tenanted (not ideal but financially good for rent and depreciation). We are about the have a baby and I will be on part time wages, which our budget allows for. Essentially if we follow this plan we will have $750 left per fortnight as a “buffer”. The buffer would cover things like fun purchases and outings, clothing, linen, children’s activities. The $750 buffer does not include any extra money we may get from overtime or tax returns (our wages go up marginally every year). We plan to have a total of 2 or 3 children in the next 3-4 years. We already put away $80 per fortnight for unexpected bills. If we fell on hard times we could sell the 3 bedroom home and I could go back full time with mum looking after the children at home (undesirable but workable). Us all moving into the 3 bedroom home would be an absolute last resort as it would be very cramped and not good for family relationships. What is an appropriate buffer for a family of 4? As an outsider looking in, what option would you take? Can you see any other options we may not have considered? We are very open to suggestions. Thanks. Additional info: We are in our mid to late 30’s, emergency service workers (very secure employment), have 1 older rarely used car, and 1 new family car salary sacrificed. We are pre approval for the loan. Mum is on a part pension and can not afford Moreno than $100p/w rent.