Purchase first home or Invest?

Discussion in 'Investment Strategy' started by Sarah123, 16th Jun, 2018.

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  1. Sarah123

    Sarah123 Member

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    16th Jun, 2018
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    Location:
    Sydney
    Hi,
    I'm new to property chat and need advice. I'm currently renting in the Liverpool Sydney area and want to purchase my own property. I'm a single mum and my goal is to have my home paid off in 30 years time. I'm confused whether my first purchase should be my home or investment property.

    A bit about my current situation:
    - i have a deposit of $60 000 and still saving
    - gross income of $100 000 plus. Working two jobs at the moment.
    - I don't mind renting for the next 10 to 15 years

    Possible scenarios...
    - purchase a new apartment in Liverpool for $550 000. This would be an apartment I can see myself moving into
    - purchase a cheaper unit and renovate. Older units are $350 000.This will help me build equity and purchase another home. This will be for investment purposes and then I can sell in 20 years and buy a new apartment in the same area. Sometimes I think would the growth of two cheap older units be equivalent to the growth of a new apartment in Liverpool. So is there a point?
    - invest outside of Sydney with the help of a buyer's agent. The goal here would be to invest in an area with better growth than Liverpool so I can sell the property later and then buy my own home in Liverpool.

    My main goal is to have my own home paid off. My ideal goal would be to pay off my future home quicker and have multiple properties so I can retire early.

    Any suggestions would really be appreciated.
    Ta
     
  2. housechopper2

    housechopper2 Well-Known Member

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    Purchase an older villa-unit or apartment in Liverpool and live in it. Don’t go overboard with renovation. Don’t expect capital gain from a new apartment.

    Consider buying with an Interest only loan so you can build up savings in an offset account ready to purchase your next property.

    Your circumstances may change in 4-5 years time, in which case you would then be well set up to move out of the apartment and use your offset savings as a deposit on somewhere larger.
     
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    a really important question is how sustainable is/are running 2 jobs ?

    ta
    rolf
     
  4. Sarah123

    Sarah123 Member

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    Thanks for your suggestions! Never thought of that. Did you suggest moving into the property so it wouldn't be considered an investment? I really like where I'm renting at the moment. Also did you mean sell the 1st property after 4 or 5 years time so I'm relying on the capital gain or keep it and then change the loan to principal and interest? Thanks again
     
  5. Sarah123

    Sarah123 Member

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    Hi Rolf,
    The figure I gave is only for one job. I didn't include my salary for my second job because it's not sustainable.
     
  6. housechopper2

    housechopper2 Well-Known Member

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    Yes live in it so it wouldn’t be considered an investment. Ideally if your aspiration is to own multiple properties, I wouldn’t plan on selling it. Rather using the capital gain to reinvest elsewhere. But if you wanted to sell it, a tax free capital gain is a great outcome.

    When the loan tips over to P+I in 5 years time, the goal would be that if you turned it into a rental, the rent would cover all repayments and expenses.
     
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  7. Sarah123

    Sarah123 Member

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    Location:
    Sydney
    Makes sense. Thanks again for your helpful advice. I definitely will be considering this option. Have a lovely evening!