IP 2 purchase and my thoughts

Hi All,

our current prop purchased in 2016 for 1.4 million - came back with bank valuation of 1.6 in NSW (Sydney)

so with available 300k equity to play with we have finalised purchase of IP 1 in Western Sydney for 760k - with both house and granny flat currently rented for 830 per week. being corner block and in good location it should always get 810 - 830 per week for next 1-2 years for sure if not higher. in NSW (Sydney)

now we are looking at utilising our remaining 120k equity and purchasing IP2.
so mostly aiming Brisbane would be best bet right. as in future we may move out of our Prop in Sydney and even make it IP for few years. by buying in Brisbane - future land tax would be minimised.
also assuming for right buy I want to aim for good or better capital growth. as IP 1 purchase in Sydney is purely buy and hold type IP purchase.

i earn 130k a year
partner earns 130k a year roughly.

 

Congrats on the real estate purchases to date. Do you have question?

I'm not sure I understand your maths. $1.4M to $1.6M is $200K equity since 2016 to now, but then you go on to say "with available 300k equity to play with" - something is missing here

 

current equity is 300k release. as purchased for 1.38 million. current loan is 980 k.
so 300 k equity has been released..

the question is with my current scenario

1) better to look for IP2 interstate right, as we may convert Prop to IP in few years time..
2) the aim of buying this IP2 with more focus on capital growth, rather than ROI as first purchase is focused more on ROI and long term hold.

 

Unless I am having a senior's moment (quite possible ), I think you are confusing what ROI means, which is a % calculated by summing figures for CG & rental income less expenses, and dividing this by total investment.

 

Is your question where to buy in Brisbane?

 

you mean "rental yield"?

maybe come back a step. there are lots of questions need to be answered before coming to the question of GC vs Rental yield.

1. what is your future family plan?
2. what do you want to achieve through all these investment? what time frame?
3. how old are you? how many more years do you plan to work?
4. are you going to buy another OO soon? and keep the current OO or sell?

 

Eric/All:

1)
I am currently 36, partner 34, 2 kids 8 and 6. Our current family income is 250k combined in Sydney.

2)
Through investment in 15-20 years time have minimum 4-5 fully paid off IP. that generate rent/income for us.

3) Health permitting and work being there. we would like to work till we both are 55 minimum.

4)
where we currently live OO
valued recently 1.6 million....
roughly 1.28 million loan...
980k - one loan.. - with 530k in offset.

other is 300k equity release. -
from which 182K - is being used for 20% deposit for IP one purchase and stamp duty..

so leaving another 120k equity - for IP 2 purchase.


5)
Erik in next 3-4 years we dont plan to move our house. happy where we are. thinking out loud. we buy IP 2 right away.. if later after 2 years - things permit - buy IP 3..

but after 3-4 years. what I have in offeset now nearly 530k and even add as much possible to it...
we then make our current Home (OO) into an IP. so we take our savings from Offset and then buy a different home perhaps 3-4 years down the track. if it makes sense. Holding onto our current home 1.6 million worth today for another 5-6 years more as IP minimum...

reason being current home is 5 acres in Western Sydney... yes rural zoning... i believe even if there is no zoning change... trying to hold to that property as long as possible. cannot go wrong. with Badgery Creek airport. and all other things happening in Western Sydney. we are literally 4 kms away from nearest suburban homes and 8 kms from Train station... so want to hold to that as long as we can..

 

with your resources, there is a lot you can do, but need to be more strategic, maybe get in touch with a good broker on the forum to plan out a few steps.