Hi all, I’d like to share my current situation with the forum. We are a couple in our early 30’s with a combined income of 320 k. We have just had a baby which has changed our perspective of life quite a bit . We own 4 investment properties as follows: IP1 2 bedroom apartment in Northcote, Melbourne Value: $600k Rent: 390 $/week Equity: $160k IP2 2 bedroom townhouse in Fawkner, Melbourne Value: $650k Rent: 420 $/week Equity: $170k IP3 3 bedroom house in Keperra, Brisbane Value: $900k Rent: 530 $/week Equity: $420k IP4 3 bedroom house in Kallangur Value: $650k Rent: 500 $/week Equity: $120k We also have a small portfolio of shares. We are currently renting but would like to buy a house in the Mentone area in 2 years time. My initial thought is to pull some equity from IP3 and also sell IP 1 as i believe is the asset with worse capital growth potential. Would that be a fair call? However I’m also unsure of the capital growth of the townhouse in Fawkner. I’m keen to know your thoughts.
Hi Carlos hard to say, because it depends a lot on what that home on Mentone may cost in 2 years time, let alone where rates and therefore borrowing capacity will be in that time. Youd want to avoid LMI if possible, since with a current median price on the 1.4 range LMI will be exxy. Cant comment on the growth ( or decay) of the existing properties, im sure others will have a few though. When u say you have equity of X, is that the difference between the loan amount and the stated value ? ta rolf
I am not an expert by anymeans but I'd say it depends on what your goals are. Once you buy the PPOR in Mentone, are you going to be done in terms of property? Or are you planning to keep buying more IPs? The reason I say your goals are important is because the decision you take now will impact serviceability in future hence your ability to buy the property after (if you so wish). The property you buy in Mentone will tie up a lot of capital and you will lose some of that yield you are enjoying now which will impact serviceability.
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