Hi guys, first time poster, long time reader. I am in a little dilemma at the moment and thought if I can get some valuable feedback and experience from you will help me decide what to do. My wife and I are 30 with no kids. We plan to have at least 1 or maximum 2 kids in the future. At the moment, we are living in our parents’ empty townhouse in Camberwell. In-laws are in Box Hill. We have a 2 bedroom apartment in the CBD as an IP. Currently owing around 450 to the bank. Apartment valued around 590-610. Rent is covering around 80% of the monthly P+I loan. Initial plan is to hold this with a view of having the rent pay off the IP. We have 200K now ready to go for our next PPOR/IP. The dilemma is whether we purchase a property that we would eventually move in (with a very long term view of wanting CG) or get something as purely IP in an area we have no intention to move into but sell this once the parents decide to sell off this Camberwell property. Ideally, we would want to buy a PPOR near our family and it is obviously rather expensive in the east. This could mean we might need to sell the IP and max out our borrowings and make some life sacrifices. Happy to hear some of your constructive feedback!
Hi Samoo, The first thing to do is stop paying P&I on your IP loan. That is costing you more than you realise - it's not a tax effective decision, you're much better off using IO payments with an offset account. You would benefit from some specific planning - buying a PPOR at some point will very much determine your next move with the IP - the answer will depend a lot on your borrowing capacity, ability to save, length of time until you have kids and a few other things.
If you're willing to venture into the west, try Sunshine. In my view, there is no better Melbourne PPOR suburb than Sunshine (at least where prices are still relatively reasonable). For your budget you could get an original H. V. McKay home in the area around Matthews St/Parsons St/Monash St. It has everything that makes the fancy inner eastern suburbs great (beautiful heritage homes, wide tree lined streets), and it's a solid 13 minutes away from town by train. Take a day trip to Geelong, Ballarat or Bendigo if you like - Sunshine Station will take you there. The Hampshire Rd shopping precinct is close by, and you can go for a Sunday morning bike ride to Seddon or Yarraville if you like. The best part is, you don't even need six figures, and the area's growth stats are incredible. Sunshine's currently undervalued prices won't last forever.
Sunshine was undervalued 2 years ago Could of got the house on 600sqm for 350 Not sure i would be rushing in now!
Probably not a bad thing you wernt paying attention. Allows you to have a more positive outlook Wether thats good or bad, time will tell
All I can say is through my eyes, for what you get in Sunshine (location and property type) it's still cheap as chips. Not to mention it makes an excellent PPOR suburb with high growth figures to boot.
It might have high growth figures now in the last two years but what about its growth figures for the 30 years previous? Prices have pretty much doubled in just 2 years. Very risky time to buy there in my opinion. 700,000 is not cheap as chips either. I reckon its a hype price created by low interest rates. If rates crawl back up to 6% then the average joes loan repayments would be around $1000 a week. Or about 300 minimum chips
@Samoo it's about personal priorities. You're now entering a chapter in your lives where family will be top priority. Having the support of in-laws close by is extremely important with young children (trust me!). And having enough space to accommodate two small children is also important. It's easy to spend all your time looking at the horizon, but no time enjoying your current surroundings. So perhaps a house / large unit near your in-laws would be wise; it can always be an IP before you move in. Good luck!
Hi all, thank you for the advice and recommendations. Has always been intrigued by the west but never spend a lot of time there. I can even say I probably go to the west side of Melbourne once a year. Therefore, I will very inexperience in determining any 'good pockets' of these suburbs. I did have a look at some of the properties around Footscray, Maidstone and found the period homes to be charming. On the other hand, my wife would definitely prefer to be nearer to our family. However, it is so expensive to purchase in the suburbs next to our families. Therefore, I might need to start looking at purchasing somewhere else and use it as purely IP and rent near our families. Do you think I should hold onto the CBD IP or sell it and use it with my 200k deposit for a more expensive property? The value this IP has not increase significantly for the past 5 years. Pretty much rent is just paying off the loan at the moment.
There are many pockets in Sunshine (some nicer than others). It's also now a signficant train station where trains coming in from the regionals stop.
