Not sure what the next step should be

Hey all,

I am 32, from Melbourne. Earning 100k. Partner is on 75k

In 2017 I bought an IP for $555k in Pascoe Vale Vic. 2 bed villa unit on block of 4. It is renting out for $430 a week. Currently on a P&I Investment loan. Its costing me about $300 out of pocket a month to cover. I haven't had it revalued, but it seems most similar properties are now selling for the same if not slightly higher.

My partner and I have saved up approx $90k and were looking at buying a PPOR. We both work in the city, and with that kind of deposit we cant find anything really suitable that's not over 30km from the CBD. We have been told our max purchase price is $638k, with a large chunk of LMI thrown in for good measure. Our only options for a PPOR closer to the city seem to be a unit in the north/west (not keen), or an apartment in the east/south.

Wondering what peoples thoughts would be on buying a 2 bed PPOE apartment in a low density building somewhere in the south/east VS buying an IP together (was thinking of Ballarat or similar) and just continuing to rent somewhere close to Melbourne CBD.

Cheers

 

No equity in the IP?

 

Well I bought it at 555k with a 20% deposit. As I said I haven’t had it revalued . The deposit my partner and I have saved up includes everything in my offset.

 

I would try to ascertain whether there is any usable equity as you may be able to avoid LMI on the next purchase.

This would be the first step.

 

Thank you for your input. I will investigate further

 

Why don’t you move into the IP for 2 years while you save up a larger deposit?

 

Try some of the online valuations for a guide

 

I have considered this. Not really sure it will work out much better savings wise though. The rent I am paying now is less than what my tenants are paying. So I would be more out of pocket paying off the mortgage on the IP whilst living in it than I am now.