1 property or two



From: Cathy Booth

This is the 2nd time we are about to invest in property. First time a disaster. - wrong advise, wrong loan, wrong town. Based on my husband and my income and equity in our current home which is mortgage free we can borrow $600,000 (already found out). My husband wants to purchase an acreage in Brisbane with a 4 bedroom home on it, with the view to retire there, but with capital gain. We also would like to buy a property 4 - 6km from city centre in growth area in Brisbane. The dilemma is do we buy 2 now and have 1 loan and less fees, or do we buy one now and one later this year. Also we have $100,000 liquid, so am unsure whether to borrow $100,000 less ($500,000) and use the $100,000, or borrow the $600,000 and then pay $100,000 off straight away to get us further ahead in our loan repayments.

Also - can anyone advise a good accountant in Brisbane who has property as I don't know if we are getting the right advice. Does anyone have any advise for me??? Thanks so much, it's hard trying to decide what to do.
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Reply: 1
From: See Change

I wouldn't worry let the concerns about one or two lots of fees determine your decision. In the overall scheme of things it's a minor consideration.

What I would recommend that you try and do is preserve your capital as much as possible . At this stage you may be only thinking about the pro's and cons of buying one vs two but in a year or two the question maybe "how many more do we want to buy now?"
If you put more capital in the loans at this stage or pay down the loan you will be limiting your future options.

The alternative is to set up an offset account. In this, the money you have in the offset account is taken away from you loan balance when your interest payments are calculated. As your loan is still the same amount you still maintain the tax deductibility of your loan. You can then withdraw the money when or if you need it.

see change

it's better to be guided by your dreams than your fears
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Reply: 1.1
From: Manny B

Hi Cathy,

I think you are taking the right path (looking at investing in IPs), but you will need to separate your personal emotions when making the purchase, therefore not mixing up business with pleasure... your investment decisions on IPs have a certain goal, ie. buy well, get good returns & above all good future capital growth (that is what can make you rich) to help you retire comfortably...

If you make the right choices now & buy well (I don't think acreage/rural will increase in value as rapidly as something closer to the CBD, ie. 6km) you will be able to retire in the future & will be able to afford to purchase the acreage needed to retire on...


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Reply: 1.1.1
From: Jerry Maguire

can you check your e-mail address please cathy cos i'm trying to e-mail you some details but it got bounce back to me...

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From: Cathy Booth

On 6/24/02 10:38:00 PM, Jerry Maguire wrote:
>can you check your e-mail
>address please cathy cos i'm
>trying to e-mail you some
>details but it got bounce back
>to me...


My email address is cathybooth@austarnet.com.au (I no longer use the other bigpond one.

Thanks for replying to me.
Cathy - hope to hear from you soon
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