Small house or larger

Discussion in 'What to buy' started by Mdcosta, 18th Mar, 2020.

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  1. Mdcosta

    Mdcosta Member

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    Hi all,
    I'm a first home buyer and planning to move in. Im confused on 3 properties:
    1. Small house. Very well maintained in 330m2 land.
    2. Large house. 592m2 land. 2 mins walk from the first property. 15 year old house and asking price is 75k more than the first property.
    3. A house in 400m2 land walkable to train Station. Very well maintained house almost the same asking price as property 2.

    I'm planning to buy a investment property in 7 years. Which of these options do you think will add more equity?I know the first one will save me a lot of money and I will be able to finish off the loan quicker. But I'm able to afford property 2 and 3 at the moment . So a bit confused.
     
  2. Trainee

    Trainee Well-Known Member

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    Are 1 and 3 new?
     
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    One strategy is to buy the cheapest main residence that you can afford and then buy a future main residence which you rent out now. Get some growth in both and then when the timing is right sell the first main residence and move into the investment property and use the proceeds to debt recycle.
     
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  4. Mdcosta

    Mdcosta Member

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    1 is 7 years and 3 is 12 years
     
  5. Stoffo

    Stoffo Well-Known Member

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    All depends on your long term strategy.
    As per @Terry_w buying a cheaper smaller property will allow you to punch extra money into the offset, allowing you to turn the 1st property into an IP later or save for anotherIP.
    There are many ways to approach this, Iook at every property like an investment property :D
    Rentable, close to transport, not on a main road, land component and all the other criteria..........
    Read alot on Property Chat :cool:
     
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  6. The Y-man

    The Y-man Moderator Staff Member

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    How much are we talking about?

    If the difference is $75k and the first property is $2.6 million it's a not brainer....

    The Y-man
     
  7. Mdcosta

    Mdcosta Member

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    Melbourne
    The first property is 510k
     
  8. The Y-man

    The Y-man Moderator Staff Member

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    The one with the most land and oldest house.
    Reason:
    1. land is hard to "manufacture" in an established suburb. Even in new devs, 400sqm seems to be the norm.
    2. new houses (buildings) go down in value (it is called "depreciation"). The newer they are, the faster they fall.
    The Y-man