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Discussion in 'General Property Chat' started by NewGuyACT, 29th Aug, 2016.

  1. NewGuyACT

    NewGuyACT Member

    Joined:
    9th Aug, 2016
    Posts:
    20
    Location:
    Canberra
    Hi all

    I'm looking for a bit of advice on where to go next. A bit about the situation - married, 2 young kids, mid 30s etc. My income ~$200k per year, wife is $60k working PT ($100k FT salary).

    PPOR - value ~$665K
    Personal debt - $430k ($300k fixed, rest variable). $30k in offset.
    IP 2 deposit - $80k IO

    IP1 - value ~$430k (original PPOR)
    Loan - $275k IO
    LOC - $90k - unused

    IP2 - value ~$320k
    Loan - $255k IO

    Clearly I can buy another IP, buy to what end? I don't retire (unless I want to I guess ) for 30 years, it just seems a long way off. I currently salary sacrifice a bit into super to get $25k a year, estimates suggest I'll end up with a $60k a year pension (plus another $15k pension from a previous job, and my wife's super will be a fair bit too). My expenses are relatively high with private school etc, but I feel like I'm not making the most of my situation which has me worried. I know this is a property forum but any non-property related advice would be great.

    So, what should I do?

    Other info
    - We would like to have our PPOR paid off with a tax free pension of approx $100k p.a in retirement (on today's money ).
    - We've seen a couple of financial advisors and they didn't seem anywhere near value for money and focused on saving money rather than making money.
    - Happy to work until at least 60 - preservation age of super.
    - we are in secure jobs, if anything I'm underpaid as I am very flexible in my hours. But I enjoy going being involved in my kids education etc. Similarly my wife could go back FT but isn't likely for a few years yet.
    - I am not overly hands on, and the idea of committing my time to projects isn't that appealing. I reckon I would be better off doing what I do and just working more than committing to something else.

    I think that's about it.
     
  2. Brady

    Brady Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    452
    Location:
    Adelaide, SA
    Non-property look into the LIC thread - would be combining this with some debt recycling to accelerate non-deductable debt reduction. Exact approach I'm thinking about whilst I patiently wait for my PPOR build to be completed and collect excess cash.
     
    Colin Rice and Terry_w like this.
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,970
    Location:
    Sydney
    Who owns each property and what state are they in?

    Debt recycling is good - it will speed up (potentially) the paying off the the PPOR debt.
     
  4. NewGuyACT

    NewGuyACT Member

    Joined:
    9th Aug, 2016
    Posts:
    20
    Location:
    Canberra
    Hi Brady / Terry,

    I'll have a look into the LIC thread tonight, however, the properties are all Joint Tenants (couldn't get my wife to put any in just my name...). PPOR and IP1 are in the ACT, IP2 in Victoria.

    Just a bit of extra info, each IP is a standalone house, low maintenance. IP1 - Rent is $420, IP2 - Rent is $365.
     
  5. JacM

    JacM VIC Buyer's Agent Business Member

    Joined:
    12th Jul, 2015
    Posts:
    1,106
    Location:
    Melbourne, Australia
    Last edited: 30th Aug, 2016
  6. NewGuyACT

    NewGuyACT Member

    Joined:
    9th Aug, 2016
    Posts:
    20
    Location:
    Canberra
    Hi Jacqui,

    I have considered increasing the contributions to get up to $30k, but given the performance of my super fund over the last little while I wasn't jumping out of my skin to commit extra money. I am also not too keen on having everything in Australian property which would be the case if I went the SMSF property path - I can't get a Chris Rock skit out of my mind where he mentions to "diversify your portfolio".

    In regards to debt recycling, the concept sounds fine (assuming I understand it correctly). Hence the redraw on the PPOR to buy IP2, and the $90k LOC on IP1 that I haven't used yet. I guess the million dollar question is... what do I do with it?