Should I sell expensive house & buy outright PPOR

If it was me I’d borrow back up to $1.25m and switch to interest only at the same time, rent at $900pw would cover the interest entirely.

Use $250k & your new free’d up cashflow to start building a portfolio.

 

To keep the house with enough income, rent out two rooms @$220 each or move to a small studio.

 

A few things:

1. Prioritise your health first. Have you sought some help with the mental side of financial stress? Sounds like you are in a white collar job and should have access to an employee assistance program of some sort. Clear up your head before making and major life decisions.

2. How serious are you about starting a business? It sounds like it could be an escape path. If you are super serious, do it on the side with your FT work. Running a business is great for self development and learning. At the same time is super stressful and life consuming.

3. If you could wave a magic wand that would solve things in a sustainable way for you financially, what would you do? I would recommend sitting down with someone like a coach or close friend to explore options and take one step forward to your preferred option #1.

4. You haven't responded to any of the suggestions to renting out partially or AirBnb. What's in the way here? It seems like the most logical solution on paper.

5. How come land tax is an ongoing issue? Can this be addressed in some way? Seems like a one off from your other post and is now your main residence (exempt for land tax)?

6. Have you had a chat with your broker to look at ways to smooth our your cash flow?

 

Unfortunately still have another decade+ to go on the child support. I have 50/50 but it's high because I earn much more than the ex.

I can re-draw 200k I have in offset but can't switch to IO again unless I move out and rent elsewhere (otherwise I fail servicability), if the loan incorporates the rental income then I can pass (just) and borrow 1.2m refinancing elsewhere. (which gives me the 1m loan I need and 200k line of credit essentially)

But then I believe because I'm maxed out on this house, I can't then use that 200k extra as deposit because I'd likely fail the servicability on getting another loan/debt. I'm also a bit scared to be buying more properties in the hope that the surplus income can help pay for the one bleeding me dry.

Very good advice, yep I do have an EAP at work and am on top of my mental health!

Very serious, I have a lot of experience in startup/entrepreneur space so this is not something new to me...but right now cautious approach is keep the consistent reliable corporate salary...

Ideally it would be vacate this house bleeding me dry and rent entire thing out, and come back to it when my circumstances change (income increases or I meet a new partner and want a large house together), but have others pay for it (renting) in the meantime. However, to sustain the mortgage as P&I and renting elsewhere myself, after I pay everything (literally everything, except any spending money/dining or entertainment) I only have $170/wk left.

28/52 Regent street, Chippendale, NSW 2008
I could buy something like this, outright, live in it and all my accom would cost is $100 a wk (rates/strata), no loan, but then a) my kids will be cramped in a very tiny "study" and only growing bigger, b) if I ever meet a new partner the place is immediately unsuitable if they have any kids and c) I waste having paid stamp duty on the big house to sell so quick and pay it again for the new purchase...

as tempting as it is to only have to come up with $100 a week for accom vs the current $1000+ (!!!!) I can always have this as a back up plan if I can't cope because I suspect the CG on these studios going for 450-500k will always be minimal because banks don't lend for that size..?

It's probably a great option for improving mental wellbeing but not financial wellbeing.......

 

The bed is next to the kitchen!

 

What I have decided to do is rent 1-2 rooms out inside my house, to flatmates, and collect rent from them. Currently I can break even down to $0 paying for everything with my budget (incl P&I house repayments). If I can rent one or two bedrooms out for $300 ea; thats $600pw in my pocket, plus the tenants will share bills with me...

The only real downside is I no longer have exclusive kitchen, living, areas...as everything is shared....but if I want to hold the asset, its the only option to relieve cashflow. AirBNB I'm not ovely keen on because my kids live with me and the thought of having random people all the time might not be great, plus the extra cleaning/washing involved... I've settled for this option (house share) for now....but still thinking in the back of my mind about potentially selling and getting the studio outright...

I wonder if I can use the 200k extra I have in offset as a deposit to a shoe-box studio (30m2 for instance), borrow additional to fund it and rent the entire big house out. However I feel I fail servicability because even the main loan of the big house if I live with my parents, and it is rented out, I can only borrow what I've already got ($1.2m)....

 

breakfast in bed Terry?? Lol...

Yeah, it's not a great option but just trying to get my head around all these diff ideas floating around to land on the best solution. It's a hard decision....