Hi, How would you invest $300k cash in Perth? We are tossing up between: a lifestyle decision: dream home, 2000sqm, $700k mortgage for $1M property for PPoR; or an investment decision: nice home, smaller 600-700sqm block, purchase price $700k with second smaller IP in the future, (comfortable serviceability risk, but less comfortable about block size for PPoR) Both in the same area as the school catchment zone is important to us. We have two kids, 3yrs and 1yr and a small boat so yard size and rear access are important lifestyle factors we would love but can manage on a smaller block.
I would select lifestyle, its a good time to upgrade primary residence in Perth, not necessarily a good time to invest though Different rules apply for primary residence. Mtr
This is affected by your income levels and stability of income levels. Future cash windfalls like an inheritance are a factor. I would go the big block. But that does not mean you should.
@Kasey, this is what we did. Not saying it will work for you. Between the ages of 20 to 55, we bought for investment. In fact, we lived in the worst house in our portfolio. After we retired at 55, we have made two lifestyle purchases. Instead of these two purchases, we could have bought another 8 to 10 investment properties but we went lifestyle. Why? Because we felt we deserved it. We believe in the concept of delayed gratification and we LIVE it.
Hard to say. If it's really your dream place and you can afford it, then I'd say go for it. Is housing development moving toward your dream block? If so, it might a land-banking/PPOR opportunity.
Hi Kasey and welcome. Really to many factors to be considered in this question. As above, job security, wage, further kids........ Do you have a PPOR or rent ? Any other investments. Kids only get more expensive as they get older Still, you have a boat, so must be doing something right/well So, my answer depends on your long game Do you buy the dream home and spend years paying it off..... Or do you buy the investment now, and in a few years add the dream home also
This exactly what we are trying to work out. Job security is ok but the first 12 months will be the most risk and job security will improve after that. We have worked out that a 20% deposit with a $800k loan and $100k buffer in the offset will cover us through this period. We have considered renting first or buying an investment then dream home later. I guess the biggest risk is this type of property is rare in this area and as the market recovers we will be paying upwards of $1.1M for the same property. We have no other investments. We have just sold our only investment and PPoR (both in Brisbane) hence why we now have $300k cash. Long game is to live in Perth for the next 5-10years then make a decision on staying in Perth or moving back to the east coast. We have family on both sides so both locations have big pro's. The interest on such a huge loan makes me want to walk away already, but in saying that, its comparable to what we had on our last PPoR. Hmmm...so tough.
Love this idea! And well done on retiring at 55! I don't know if i have the patience though. I really love the idea of having the perfect yard for the kids to grow up in and have an awesome childhood. We only have them for such a short time in our lives and I want to make the most of it while i can. In saying that, i still had an awesome childhood, but the blocks just weren't as small as the average city block is now.
Kids don't need the perfect yard to have an awesome childhood. There are tonnes of kids who have perfect yards but have crappy childhoods. Then there are tonnes of kids who have crappy yards but have an awesome childhood. Our kids are now in their early 30's and we talk to them nearly every day. They are still in our lives, as are their partners and our only grandchild. We don't see that changing over the next 20 to 40 years. What is your definition of a 'short time'?
Having sold your PPOR & an IP I'd say DO IT Work hard and save hard for the next 18-24 months (incl selling the boat) Then use the equity to buy back into another IP Don't forget to barter, IE: take the emotion out of it being your dream place, play hard ball, play to win
Totally dependent on income levels and how quickly the loan can be paid off or offset filled. The worse case senario would be one where the large non deductible loan stops you from investing for 10+ years. A large ppor loan relative to income is in my opinion what stops many people from retiring early. If that's not the case then go for it.
