Hey guys and girls. Long time stalker, first time poster. About Couple (Early 20s) Combined Salary ($130,000 gross) I should add this will rise to over $150k when I complete my apprenticeship next year. Properties Both purchased within the last 12 months IP1 Regional Vic Bought $350k Owe $275k Rent $360 a week Repayments $280 a week P&I Variable IP2 Regional Vic Bought $340k (Bought roughly 15k below MV) Owe $304k Rent $320 a week (will increase once CV19 is over) Repayments $310 a week P&I Variable Other No CC debt, No Car Repayments etc Currently Renting One Day down the line would like a PPR but all about accumulating IPs for now. Why? We chose these properties as we intended to travel for a couple of years (prior to CV19) so we wanted something that had good cash flow and didn't blow all our savings abroad. Would happily live in either IP in the future if need be. As we can't travel the world anytime soon we have decided to go again for IP3. Goals 1st goal - Enough passive income to cover all bills 2nd goal - 50k passive income to work Part Time 3rd goal - Ultimate Financial freedom 80k (ish, hard to know with inflation etc but we are not big spenders) Position Approx 25k Savings. We try to save 1250 a week. Mortgage Broker says we can currently borrow up to 600k. We would like to buy towards the end of this year, perhaps if there are some bargains. However we would most likely save a bigger deposit and buy early/ mid next year. Your Help I understand we cannot keep buying properties in Regional Victoria. We are open to buying interstate however we would go through a Buyers Agency. We have liked the idea of purchasing in Brisbane and then adding a Granny Flat for cash flow. Ultimately I am asking for advice because I don't want to wake up in 10-15 years and realised that I have structured this badly and obviously costed us a bit of coin. Thank you.
I think there are some issues with this in Brisbane - cannot lease granny flat separately. I may be wrong though.
Thanks for the reply. Guess I'm looking at it negatively. Just worried about not diversifying enough along with if anything happened to the area. (Over supply, Stagnant CG etc.)
If buying in VIC carefully consider land tax. You will be able to double the threshold by buying in single names rather than jointly
Yes. I have been doing a bit of research on that. One of the main reasons we went back to Regional Victoria instead of Brisbane for a GF. Thanks
I think you need to speak to your broker - or a new one, if your current one isn’t very strategic - about your plans and current structure. Also saving a big deposit v small. From what you’ve said about your current plans and situation, I’d suggest that you’d do better long term with a different financial strategy - particularly if you’re good with money, and having cash in an offset is not going to be huge temptation for you. Right now, a lot of cashflow is going toward debt reduction, and if accumulation is the goal right now AND you’re looking to buy a PPOR in the future, debt reduction isn’t really in your best interests.
@Vick B something you may want to consider depending on where you live currently is buying a place that has renovation/development potential and using it as a PPOR. Use first home buyers, renovate the property (cheaply) then once you live in it for a while you can move out and turn it into a IP hold it for 6 years and no capital gains. Being a young tradie (I’m assuming) there is no better time to renovate. Mates and family will likely help you for pizza and beer and make it a whole lot quicker and cheaper than what anyone else could do. It’s something I did in my early 20s and now at 30 have just moved back in and will sell in the next 12 months. It’s been a great move to set myself up.
I agree. I made my 6th land purchase (all in vic) in past 5 years. I love the market and have been guided well by the group members. If you can rinse and repeat, keep going until you find a similar deal elsewhere. Cheers