I just bought my first IP in Newcastle NSW and have a PPOR in the Hunter joint ownership with my wife. I have about $180k in equity still available in my PPOR (valued at $600k) but have $300k in non-deductible debt. IP1 is worth $690k with loan value 80%. Q1. Should i pay down the non-deductible debt or buy IP2? Q2. If I do buy IP2 my loan borrowing power is about $500-$600k. Where do I buy for capital growth with half decent yield? I was thinking Brisbane 10-15kms from CBD (or interstate in general to keep land tax bill down) Q3. What ownership structure should I use to buy IP2 considering IP1 is joint ownership and I hope to keep buying long term? Q4. Any other considerations I should take into account?
IMO Q1. Depends on a lot of factors, including your risk profile, expenses (especially if you have dependent children), if your employment is stable etc Q2. I think Brisbane is good buying at the moment for future capital growth (house with good land component) you will get something in a good area, Arana Hills, Everton Park, Everton Hills, The Gap (possibly, excellent school catchment), Ferny Hills, Mitchelton (possibly), Chermside West (possibly) on the northside. Q3. Speak to your accountant Q4 Future/current cost of living. Be careful in Brisbane, just because it is close to the CBD, doesn't mean that the area is desirable. Many properties have seen no real capital growth in the last decade in these areas. Good luck
Thanks Cate! One thing I have noticed looking at Brisbane suburbs is most seem to either be built up as they must be in flood prone areas or they are on a sloping block. I would be looking for a house on a decent sized flat block with value add potential are there many areas in Brisbane suites to this type of IP?
If you look in the areas that I mentioned, they didn't flood in 2011 and you can get around the 600m2 older house on good flat blocks. Good family areas, where I have multiple properties. If I was a Sydney based investor, I would be looking at these areas in this price range. My strategy is buy the "worst house in the best street" scenario, renovate and hold- I have bought houses in the $400s in $1millon streets and done well. Most of the areas I listed are close to CBD and the train.
But you do....... if your risk profile fits, then an active debt recycling strategy can make the funds ta rolf
and? What does your comment mean? Do we all need to have a "mortgage business you should be able to get some good advice for free " You need a context for your comment.
