Hi all I’ve been loving reading through all the posts and learning about different investment ideas and strategies. I’d love some direct advice / ideas on my own situation. I’m 30 unmarried and no dependents and just moved back in with the folks (no rent) since returning from working overseas as I assess next steps and save some cash. I currently own an IP apartment in Sydney purchased for 400k in 2013 and now worth approx 750k. I’ve refinanced the loan with $166k equity sitting in an offset account against the loan. I also have savings of approximately $120k. $20k in stocks. Salary approx $200k. I’m currently considering various options including: 1. buying a house where I ultimately want to build on and live and rent an apartment closer to Sydney CBD where I want to live now. 2. buy one (or two) additional IPs and rent where I want to live as above. 3. Buy an apartment where I want to live now and then sell and rebuy a house when that point comes. Potentially this option may also allow for an IP as well or investing in stock market (ie ETFs/LICs) Let me know if I’ve missed out any key information! Thanks!
Which option that I mentioned would you go with? One is there another option that I haven’t considered that you might suggest? Any advice on next steps would be greatly appreciated!
@Johnny85 - depends what your end goal is? Have you looked at the property cycles? There are several property markets in Australia.... Sydney won't give you the cash flow. Sydney will always be in demand. However only if you are willing to hold out for that growth that may happen in the future. If you purchase an owner occupied using equity - you need to be mindful of the tax considerations (Equity used will be non deductible) Home and investment purchase are two different ball games. You have a strong income to enable you to do either. So if you can share: What's important about buying 2 investment properties? VS What's important about buying something you might live in?
I guess I’m thinking of it as two completely different strategies and not entirely sure which is the smartest/best move for my situation. The place I want to live in in the future may not be the best investment decision - so it might be more appropriate to put money in investment/s for now and rent where I want to live and then buy owner occupied down the line as opposed to buying the owner occupied from the outset. Any advice given the circumstances I’ve highlighted above would be much appreciated!
Where you want to live will change with age and circumstances. And will probably be a joint decision.
There’s a whole financial strategy that needs to underpin your decision making. How much do you want to contribute to your strategy out of pocket? What do you want to achieve from property? Do you want to build a portfolio long term? No-one can advise you on the best option without a really thorough knowledge about your full game plan...and in my experience, most people haven’t really thought of these things themselves.
No one knows your goals better than you. You need to think through - so back to the two questions.. What's important about investing? What's important about buying a home? Will you be living at home with parents for long? If so, then it may be a great opportunity to expand the portfolio while you have the luxury. You may not have the same once you're renting or moved into an owner occupied property.
Rent there and invest elsewhere. Big devs mean two things as renters: you get to enjoy someone else's brand spanking new property there is likely a surplus of empty apartments so you get to negotiate rents and play owners off against each other (just be ready to move every 12 months but!) The Y-man
Thanks for your views! Much appreciated! I guess I just need to work our whether to buy a house/land in an area in Sydney I may want to build on in the future and become owner occupied in the future - or just purely buy to invest.
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