Hi everyone, not brand new as it's my second post but close enough. My name's Si and I'm currently living in Perth with my husband and seven month old baby. I've had an interest in property investment my whole life but have only just reached a point where I'm secure enough and motivated enough to pursue it. I'm hoping to soon be educated enough, as well! Our stats: Me Age: 31 Status: Currently on mat leave but hoping to soon go back to work part time. Earning capacity: Will probably be on around $26800 p/a soon. Once kiddo is in school I'll go back to work full time, should end up being able to earn up to $90000 comfortably. If I go down a management path then I may be able to earn up to $120000 eventually. Property: none Husband Age: 41 Status: Full time employed but looking for another job in his industry to increase job satisfaction. Earning capacity: Currently $95000, can possibly increase to about $105000 but not much further. Property: PPOR, bought for $365000 in 2009. Currently worth about $400000, $220000 owing on loan. $40000 in offset account. Our goals: A few conflicting goals here, we're not quite sure what path we want to take in the future. Immediately Move to new PPOR that suits our family better OR complete modest renovations on current PPOR and put up with it for a few more years Purchase at least one IP by the end of the year In 5 years Have the option to move to south-west WA if desired. Will probably be looking at significant pay cuts to do so. Rent initially with view to buying new PPOR. If staying in Perth, purchase new PPOR that suits our family better if we haven't already done so. In 15 years Husband semi-retires. In 20 years Husband fully retires. Move to south-west WA if haven't already done so, purchase dream PPOR (about $800000 in today's market) In 25-30 years I retire Travel once or twice a year At this point I'm working on developing a strategy, while trying to decide what our first move is. Currently struggling with the following: What is the best first move? Do we sell our house at the bottom of the market and buy elsewhere (also at the bottom of the market)? Do we turn current PPOR into investment (at a cost of about $3000 p/a out-of-pocket until rents go up again) and buy elsewhere now? Do we stay here (manageable but not desirable) and use our current limited serviceability on more effective IPs? Trying to get my head around how to develop an exit strategy with our staggered retirements (sell down to increase cashflow? Just live on my salary and expect that our serviceability might be shot from that point?..) We would like to diversify into shares at some point, but neither of us have much interest in learning how shares work. Is there a dummy's way of doing this? Anyway, I'm looking forward to nutting these problems out with the help of this forum (and excellent mortgage broker @Jess Peletier!). I can't believe what an brilliant resource this place is.
Hi Sigi, welcome to PC! It's difficult trying to balance the wants/needs and aspirations. Unless you really want to get out of the area you're in, I would stay put in the your PPOR, and do little things to make the place more "livable". Don't spend big $ on renovations to modify it. You'll find that as bub gets older, your 'needs' will change, and probably change again.. and you'll have tied up all that capital for very little benefit. Do a search for "debt recycling" in this forum, to see how to convert your PPOR loan into deductible investment loans. And read @Terry_w 's tips.. As for shares, there is a lot of recent interest here in Listed Investment Companies, or LICs. They are companies that hold regular shares in other companies (like a managed fund but better?). Again, you can search for "LIC" and "Peter Thornhill" and get lot's of great info. They're a very simple, boring way to save for retirement..
Thanks Phase2! Yep, the more I work on a strategy the more I think it makes sense to stay where we are. We wouldn't do anything structural, mostly things to make the space more safe and livable, like adding cupboards in the laundry for cleaning stuff and putting some kind of shade in the backyard. I've had a couple of RE agents/PMs suggest that a new kitchen wouldn't be overcapitalising and I've really had it with the lack of storage and the dodgy oven, so that's something I want to explore as well to see if it's worth it. Thanks for the advice about the LICs, I've seen the term around but every time I try to read something about it my eyes just glaze over. But I've been doing a lot of reading and learning a lot from these forums lately so I might just need to take it one step at a time. And yes, the debt recycling is something I've been reading a lot about! Sounds like it could be a good tactic for us.
Sounds like a new kitchen it is then! Are you both handy? Would you attempt a flat-pack installation? A cheap alternative to a shade sail is a portable marquee (the camping-style, fold-out ones). I used to have one in the backyard over a wading pool and it was great. Even better was being able to take it down to the river and setup a picnic spot for the day.
