Small house or larger

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

Join Australia's most dynamic and respected property investment community
Tags:
  1. Mdcosta

    Mdcosta Member

    Joined:
    16th Feb, 2020
    Posts:
    6
    Location:
    Melbourne
    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.
     
    Mdcosta, 18th Mar, 2020
    #1
  2. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    10,409
    Location:
    Australia
    Are 1 and 3 new?
     
    Trainee, 18th Mar, 2020
    #2
  3. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    42,147
    Location:
    Australia wide
    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.
     
    Terry_w, 18th Mar, 2020
    #3
    FatElephant, Mdcosta and Stoffo like this.
  4. Mdcosta

    Mdcosta Member

    Joined:
    16th Feb, 2020
    Posts:
    6
    Location:
    Melbourne
    1 is 7 years and 3 is 12 years
     
    Mdcosta, 18th Mar, 2020
    #4
  5. Stoffo

    Stoffo Well-Known Member

    Joined:
    14th Jul, 2016
    Posts:
    5,358
    Location:
    In the Tweed
    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:
     
    Stoffo, 18th Mar, 2020
    #5
    Mdcosta likes this.
  6. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,590
    Location:
    Melbourne

    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
     
    The Y-man, 18th Mar, 2020
    #6
  7. Mdcosta

    Mdcosta Member

    Joined:
    16th Feb, 2020
    Posts:
    6
    Location:
    Melbourne
    The first property is 510k
     
    Mdcosta, 18th Mar, 2020
    #7
  8. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,590
    Location:
    Melbourne
    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
     
    The Y-man, 19th Mar, 2020
    #8
    AlphabetSoup, FatElephant and iloveqld like this.
Investment properties sent straight to your inbox