Which investment way to go?

Discussion in 'Investment Strategy' started by Xewlz, 5th Dec, 2019 at 9:32 AM.

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  1. Xewlz

    Xewlz New Member

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    Hello everyone

    I have been reading through the threads to help with my situation.

    At the moment, we just signed a 1 year rental lease in the western suburb for $730/week which is split between 4 people.

    My mother wants me and my brother to buy a property together as she does not want to pay someone else's mortgage down while we have nothing.

    I went to the bank yesterday and found out that my mother and brother can borrow $690,000 for PPOR ($520,000 for IP) and my partner and I can borrow $920,000 for PPOR ($1.2M for IP) - my partner already has a property which she purchased as a Home and Land Package (the land is paid for, only a mortgage of about $310,000 so there is equity. We are looking to rent this out by Feb 2020 once the landscape has been done.

    My partner and I want to move out by the end of next year and start our own family around mid 2021. I have offered to help with the deposit for my brother and mother's PPOR but at <$600k borrow (to take advantage of the First Home Owner) it works out to be $680-730 a week, which with their salary, its very difficult to do, so they need my help with mortgage repayment.

    At the same time, I can't afford to help with the repayments whilst making our own and having a family. I made a suggestion that they buy an IP and rent a nice unit for about $400-500 a week.

    My partner also wants a PPOR but again if she goes on Maternity leave, it's going to be difficult to make the repayments alone so I also suggested an IP and we rent a unit.

    My mother doesnt like the idea of paying rent while someone else pays our mortgage as she thinks it's a waste of money and also makes me feel like I'm betraying them by not helping buy a house with them and with my partner instead.

    What I thought of is that we both buy a property unit and rent it to each other.

    What are your thoughts on my current situation?

    Thank you for taking the time to read.
     
  2. Trainee

    Trainee Well-Known Member

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    The objective view is that your family is not financially sophisticated and you do not want to buy together with them. You would be better off learning to invest yourself.

    but cant speak to the impact on your family relationship.
     
  3. Brady

    Brady Well-Known Member

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    What's does your partner want to do? Probably good discussion.
    Especially if planning to start a family of your own.
     
  4. Xewlz

    Xewlz New Member

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    We migrated here from overseas and helping each other out is deeply rooted to our culture. Im stuck as I feel like I either choose to help my family and jeopardise my future with my partner.

    My partner wants a PPOR as she has the same idea as my mother.
     
  5. The Y-man

    The Y-man Moderator Staff Member

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    This doesn't make sense - I thought the royal commission was meant to stamp out loans that people can't afford?

    The Y-man
     
  6. wylie

    wylie Moderator Staff Member

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    If your mother and brother can buy something without you, why don't they do that and you do your own thing?

    And I do also wonder how they are approved for a certain level of loan but you say they cannot afford it. Surely the bank would have looked at their total situation before giving them a loan figure?
     
  7. Xewlz

    Xewlz New Member

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    No they can afford it but they just want me to help with the repayments
     
  8. wylie

    wylie Moderator Staff Member

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    If they can afford it, why do you need to help with "their" repayments? What is in it for you?

    Is your partner ok with this?

    I think you are tying yourself to a mortgage that you have no control over and to a family situation that will go on long after you have children. It will limit you in what else you can do long into your future.

    Even if you are not on any document, how can you say "sorry, I'm not supporting your lifestyle any longer". Once you start, how do you stop?
     
  9. Xewlz

    Xewlz New Member

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    I will be helping with the deposit to help get them a start. Before I met my partner, our family goal is to buy a property together. Now that has changed.

    My partner said the same thing that if I helped with the mortgage repayment, when does it stop or how can I stop.

    I guess what I need to figure out is if its their best interest to just purchase an IP and rent (to others or to me and my partner) and we buy an IP that we rent out to them
     
  10. The Y-man

    The Y-man Moderator Staff Member

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    IMHO Leave it at that - I'd say you have done your bit at that point and live your life.

    You can contribute non-monetarily from there on - be it helping with reno, cleaning, garden whatever.

    The Y-man
     
  11. The Y-man

    The Y-man Moderator Staff Member

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    Then they need to buy a cheaper place. They would be living beyond their means.

    The Y-man
     
  12. Sackie

    Sackie Well-Known Member Premium Member

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    At some point you need to do the mature and responsible thing and put your own future first. Even if your family selfishly won't.
     
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  13. Big A

    Big A Well-Known Member

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    Just from what you have said so far I would not do anything that ties you to other family members. Don’t buy with them or buy and rent to them. It will end badly either way.

    personally I don’t think you should be helping with the deposit either. But that’s your call. But that’s as far as I would go if I really liked my family.

    think of your own future family before you lock yourself into a long term problem. And if your family really cared about you they would want you to do what’s best for you first.

    That’s how I see it anyway. Good luck.
     
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  14. marty998

    marty998 Well-Known Member

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    So you need to stretch to buy a PPOR, keep your partners property as an IP and support your brother and mother with their future mortgage, and hand over whatever is left of your savings for their deposit and start a family of your own? With your wife taking time out of the workforce to have a baby?

    Is your salary enough to support all of that?

    Does any of that stress you out?

    Dude. Leave your brother and mother to fend for themselves. You are never going to win this one with your partner if you choose them over her.
     
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  15. Maximus

    Maximus Member

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    Im a bit confused can you clarify how renting off each other will benefit anyone apart from the tax man? Assuming its all done by the book you will essentially be paying tax on it.

    Also after having worked with family for many years i can honestly say it has been and still remains the worst decision/experience of my life and only now 8 years on am i trying to cut my losses and move on.

    For some people doing business with family works well, but for the most part the people that have i discussed it with have said the same thing and that is "dont do business with family".

    But its your call at the end of the day, in terms of your mother i can understand not wanting to pay rent but if you dont have money to buy without having to rely on someone else to pay your mortgage maybe they should look at moving somewhere cheaper.

    I also come from a background where helping family matters and i stayed as long as i have because i felt guilty as im sure you are feeling, the fact is i have become very bitter and irritable when dealing with family as their demands are never ending.

    Also just a thought, why not buy a house out west and put a granny flat on it?
    You can buy a decent house just west of liverpool for 650k add a granny flat at 120k and you have two dwellings.
    The property stays in your name and you make it clear its a temporary situation and that they should save money for a deposit and look to buying their own place when they can.

    Edit: also your wifes property is her property, my opinion is you dont get her involved.