Hi, We are looking to buy first home in Adelaide Southern suburbs at about $400-500k (which is how much it costs to get what we want in this area). We would aim to live there for at least 5 years, potentially a lot longer if we get something we really like. We like the area and we can’t currently afford what we want in more expensive suburbs, hence looking here. We do want to buy a couple investment properties down the track but don’t have a firm plan. I am a junior doctor and my salary should increase significantly in the next 2-3 years, hence greatly improving our borrowing power. Required Specs: 4 bed or 3+study Large living area and kitchen Good size yard and at least 700sqm plot size (note that plots in this area are often generous) Outdoor entertaining area Something that is not falling apart as we are not particularly handy The area has good rental yields at around 5% but sluggish growth (2-3%) which will I assume will likely continue. Questions: 1) Given the likelihood of relatively low capital growth, is this purchase likely to be detrimental/delay our next purchase? 2) although we really want our own place now, would we be better waiting several years till our borrowing power increases and we could potentially get what we want in a more affluent area with potentially higher growth? 3) should we aim at the higher end of our budget with the thinking that the house would suit needs for a longer period, or the lower end of our budget in the hope that we may get a second property sooner? Apologies for long question and thanks in advance. cheers
When you move out of this property, will you buy another home ? and importantly, what will you do the existing one ? Sell or convert to ip ? ta rolf
Yes, if low CG the there won't be equity available to draw down for a deposit for your next purchase. The deposit for property no.2 would have to come from savings instead. It depends on how many properties you want/need. This comes down to your admitted lack of a "a firm plan" You should perhaps be asking a property lawyer & accountant what structures you need to have in place for asset protection - to avoid losing your assets from a medical negligence claim. Once you have all the above set down and agreed, then the answers will become self-evident.
Accountants - Washington Brown Values Your Time At Washington Brown, we prioritise our referral clients and guarantee a turnaround time of 7 days. Find out about other benefits of our Referral Partner Program and get in touch today. You and your clients will benefit. » Get In Touch Today