Hi all, I am toying with the idea of relocating to Young NSW. Houses range from $300-370k for 4 bedrooms on large blocks. At these prices monthly mortgage repayments would be in the realm of $1250-$1500. We currently pay $2300 in rent for a place that is much smaller than what we can get. We are currently residing in Canberra and the move won't impact my job, if anything it would be beneficial. The appeal for us is to move there for 3-5 years and pay off the property as quickly as possible. I estimate that I can pay a house off in this price range in 6-7 years. We would then move back closer to Canberra or Sydney down the track. I an aware that capital growth will likely be non existent in this area, however rental yields are decent. My plan is to utilise the paid off property to borrow money and invest in shares/trade up in the future. Am I crazy for considering a place like Young? I was relocated to Canberra in March for work, and my wife and I agree if we are living somewhere where we don't want to stay forever we may aswell be getting ourselves into the market/getting ahead via some very low housing costs. Would welcome any ideas of experiences with living/buying properties in regional towns.
Long term, where do you want to live? Is the point of moving to Young just to save on rent? How do you plan on moving back to Canberra or Sydney if the place in Young doesn't have any capital growth? Borrowing against the mortgage you have paid off is just debt recycling. Borrowing against / selling a property with growth is generally how people upgrade. Run some numbers on your plan. Make sure you include expected capital growth in Canberra and Sydney. Will you need more in 6-7 years to buy in Canberra / Sydney? The risk is you leave, and can't afford to come back to Canberra / Sydney. An alternative is to push the savings (sounds like you can save maybe 30k a year even paying the Canberra rent?) and buy something cheap in Canberra or Sydney, and at least get the capital growth of the city (if you think there will be any).
At this point in time, we are thinking the long term goal is Wollongong while still working, with a retirement to QLD Sunshine Coast. To me it seems entirely rational/logical to be at least contributing towards an asset that will later provide us cash flow. From my calculations I should be able to grow an offset account by net $3,500-$4,500 per month. From loans.com.au offset calculator, this reduces the loan term to 5 years and 10 months. The appeal is retaining my capital city wage in a very low cost of living regional town. Right now, our rent is 28.16% of my net wages, compared to between 13-19% moving to Young. In addition, if plans were to change and we stay in Young after the property is paid off, this would allow us to save $4,500-$6,000 per month. It would not take long at all at that rate to save a sufficient deposit for a move to a more desirable area. Property in Canberra just isn't there for me and I am not one that would like a large debt attached to my only source of income. I figure that if I were to lose my job, I could still survive the worst case scenario in Young while still meeting repayments. Debt recycling is something that I am very interested in doing. I lean towards property ownership purely for the advantages of cheap credit and leverage into other asset classes.
