NSW investing help

Hi all,
My partner and I purchased our house (600m2) for $650k just over 2 years ago in New Lambton Newcastle. We were lucky in that I got a job working remotely and decided to move from Sydney just before the pandemic hit and prices rose fairly sharply. We were planning to renovate (add a 3rd bedroom etc) but building costs went through the roof and we were quoted $300-350k. So we’ve instead decided to take that money and invest it, but don’t really know where to start or what metrics I should be looking at when choosing a place to invest? I go to Maitland quite a bit and like the feel and the arts/food scene there, and it’s proximity to Newcastle. But my partner already has a unit in Newcastle and I’m a bit hesitant about having too many properties in the same region. I would also be open to somewhere like Adelaide but don’t really know where to start. I’m leaning towards apartments vs house due to maintenance but am happy to listen to both sides. Any guidance that can help me narrow down my search would be great.

 

We have paid off $350k on our home (house purchased for $650k now worth roughly $750k), my partner has $200k left on his apartment that is being paid off by the renter (apartment purchased for $220k now worth $520k). I have $100k in shares (which I don’t want to touch) and we have $140k in an offset account, about 80k or so we will use as the deposit. I imagine our borrowing capacity is quite good but we are still paying off our house so don’t want to be too leveraged

 

None of that tells you what your borrowing capacity is.

As an investor you need to figure out what you can afford, before you look at what to buy.

thats your personal limit. What is too leveraged? If that means you wait 5 years to buy, what then? What if prices go up? What if prices go down?

 

I suppose what I was trying to say is that I don’t really care what the bank tells me that I can afford to borrow as they always tell me I can borrow a lot more than I want to borrow. But I will contact the bank and see what they say. As we are already paying off our mortgage on our home, I am ideally wanting to spend 400K or lower (would stretch to 450k but that starts getting a bit high with stamp duty etc). I think there are still quite a lot of opportunities around for that in places like Adelaide. Overleveraged for me would be a position where neither of us could afford to lose our job for even a short period of time due to our repayments (I have had health issues in the past and hence my cautiousness). If prices increase to beyond our reach, then we will hold off and re-evaluate/reconsider whether we should instead value add to our existing property with a renovation. If they come down then great.

 

I have just done a quick “how much can I borrow” on commbank and I can afford to borrow $995,000 apparently

 

Really depends on your goals. Can you reach your goals on your comfort levels with debt? Have you decided together what goal you want to reach by when, and run some numbers on a spreadsheet?

imho the strategy, including mindset, borrowing capacity etc are more important.