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NSW PPOR vs. Rent & Invest More

Discussion in 'Where to Buy' started by standtall, 1st Jul, 2016.

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  1. standtall

    standtall Well-Known Member

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    Location:
    Sydney, NSW
    Situation - 2 IPs and a PPOR, all in Sydney & surrounds and valued at around $2 mil with $500K equity.

    Currently refinancing with a Big 4 at 90% LVR (thanks to wife starting a job there and using employee perks). This would free up around $300 K in equity in offset to be used for future purchases. Household income is around $300K.

    Challenge: Current PPOR is in the Hills area, and we are unhappy with commute and quality of schools for kids. Ideal situation is to move closer to CBD and around good primary schools that feed into selective high schools.

    We plan to convert current PPOR into 3rd IP and all 3 IPs will break even on interest only loan and have no impact on cashflow whatsoever.

    Option 1: Buy a new PPOR around Carlingford/North Rocks area, ideally close to M2 bus routes and save 20-30 minutes commute each side every day. Spend around $1.2 to $1.4 mill on a large block with a view to sub-divide and develop in 10 year time. This doesn't get us a lot close to the city but schools are decent enough. Also open to other similar suburbs suggestions but good schools is number 1 priority.

    Option 2: Start renting a bit close to the CBD (suburbs like Artarmon) and acquire two IPs with the same budget.

    Cashflow considerations are almost the same with both options.

    What's the recommendation from the experienced members?

    Cheers
     
  2. Mumbai

    Mumbai Well-Known Member

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    That's exactly opposite of what I usually hear from parents :)
    Travelling to and from North Rocks/Carlingford is equally bad. If you really want to cut down on travel time, I would suggest looking somewhere along a train line.

    I am in the same boat to live closer to CBD, albeit primary school is not the deciding factor.
    I would recommend renting wherever you want and buying more IPs.
     
  3. standtall

    standtall Well-Known Member

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    This is where Chatswood and Artarmon come but buying a PPOR there would mean we will have to not only sell some of current portfolio but also not being able to buy for a few years.
     
  4. EN710

    EN710 Well-Known Member

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    Where is your preferred school?
    Train-wise, I live near Macquarie park and train ride is still very good (approx. 35 mins)
     
  5. Mumbai

    Mumbai Well-Known Member

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    I was referring to buying close to a train line. I live in Pendle Hill and the train journey to city is around 40 mins too.
     
  6. standtall

    standtall Well-Known Member

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    We are open to all good schools and going by the available rankings. Chatswood, Pymble, Artarmon, Carlingford schools etc. etc.
     
  7. EN710

    EN710 Well-Known Member

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    Personally if it's renting, I'd pick Chatswood (very convenient, I lived there for 3 years). It will be quite frustrating if you're driving around there though
     
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  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    My suggestions

    - Don’t borrow and put the money in an offset

    - Don’t incur LMI without a use as it won’t be deductible.

    get some tax advice first.
     
  9. standtall

    standtall Well-Known Member

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    Not required to pay LMI (employee perk)
     
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  10. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Make the most if it then!
     
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  11. standtall

    standtall Well-Known Member

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    Did some research and its a 20 minute non-stop bus to CBD if you live close to M2 bus stops. That's not too bad.
     
  12. Kashmir

    Kashmir Well-Known Member

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    I know it's subjective but for the most part, people love the schools in the Hills (based more on just the rankings) Agree about the buses and M2. Check the main interchanges.
     
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  13. standtall

    standtall Well-Known Member

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    We had a good perception about Hills school (moving from Concord) but we are a bit disappointed. Schools are way over-crowded due to population increasing very rapidly and apart from Matthew Pearce, most schools rank fairly low on NAPLAN.

    For kids aspiring to go to OC or Selective, Matthew Pearce is the only option and if we were to move into the catchment, why not move a bit further towards North Rocks, Beecroft, Carlingford and get a bit closer to CBD as well.