Some advice required please

Hi All,

In a bit of a pickle and am after your thoughts.

Situation

Me aged 37- on an income of $88K pa plus have company vehcile which includes some personal use

Looking at a $5K payrise at the end of the year

Partner aged 33 - about to go on maternity leave for baby Number 3 - the last one!!!!

PPOR -

value $355,000.00

Debt - IO home loan - $193,500 -
IO expires 4/4/2022

Interest rate 3.77%

Debt recycling LOC - $28,000.00

Contributing $815.00 a month off principle into LOC into managed fund

Managed fund balance $28,400.00

Performance on fund is circa 10% past year

Investment property

Value $320,000

Debt IO- $292,000 - IO expires 4/4/19

Rate - 4.12%

Rent $355 per week tenants locked in until 4/4/2020

Offset balance $12,000

CC limit $6K cleared on monthly basis.

Partner owns small car in fine condition

No other debts.

Ok issues are:

PPOR has reached maximum value for the forseable future and we as a family will outgrow this property within 2-3 years.

IP - has been reported it has an infestation of wood boreres - cost to treat with no guarantee of resolving $10K

IP is in a regional centre Armidale NSW where I believe we will see some capital growth soon with population growing, vacancy rates decreasing and federal government department moving here in Feb 2019

My IP is well located close to amenities etc I expect/predict 5% capital growth over next 3 years.

Property manager has said tenants have enquired about moving into another property they have listed with the borer infestation meaning some floorboards may need to come up etc causing disruption at the property.

Goal - have the ability to leave employment in
17 years with PPOR paid off and net income of $100,000.00

We are concerned about the risks associated with

both properties loosing value
Borer infestation
Having a place to live that can comfortably hold the family

We don’t like the idea of rentvesting.

Partner is studying at the moment also so she is looking at returning to part time employment in the second half of 2019.

What steps should we take next ?

Thanks,

Phil

 

IMHO you wont be able to do much (at least not in any meaningful way) until you are both earning solid incomes. Having 4 dependents with a single income of 88k means wealth creation journey over (at least temporarily).

I would however look at the IP you currently have and try to come to some educated guess as to weather you think it is worth keeping or not.

Bottom line is you need to get back to 2 solid incomes asap if you want any chance of achieving your financial goals.

Just my 2 cents.