PPoR fully paid - what should we do next

Hi, I’d love some thoughts - what should we do? New to this, have started researching and will continue to do so.

Our situation is as follows.

Living in fully paid unit worth 750k.

We are aged 33 earning reasonable wages, we expect both of our wages to steadily increase in the future. A small amount in super. No kids, no other debt. Some savings. A maybe on kids (would be 2 years away).

Our goal is to live in a nice house in inner north of Melb and be able to retire/semi-retire early (before 60) with a decent income.

Options we’ve been tossing up -

Upgrade to the forever home now- would involve mortgage of about 750k, then later renovations.

Once comfortable with the mortgage look at investing and also downgrade to retire early in future.

Or start investing now. Would be borrowing 100%. Buy a cheaper villa or regional house between 350k-550k, refurb it, rent it paying both P&I, then continue to buy in similar price range across the years using equity.

Buy a house around 750k, refurb and rent it, paying off P&I. Thinking Geelong or Frankston area. Would be harder to add to the portfolio due to extra costs to us but would likely grow more in value. We’d buy a block that could be subdivided one day.

I’m unsure when this would allow us to upgrade our PPOR though.

Any investing we do we’re happy with a buy and hold strategy.

Neither of us are amazing with money, we currently save about 600 a week (after all expenses and all bills).

 

You cod buy the next home now, rent it out, and debt recycle in advance before moving in.

 

Thanks Terry, I get the basics of debt recycling. How would we apply it in this situation though?
Use the rent from the property we purchase plus our income to pay down the mortgage?

 

This might help

Tax Tip 336: Debt Recycling in Advance