$450 - $700 K Mt Lawley or Inglewood PPOR

My total income (including rental) is $92 K pa. MB says the highest I can go is a $700 k loan.

The next IP I buy will be my future ppor which I will move into in around 5 -10 years depending on when I can afford to. I'm wanting a bigger ppor, mine is just too small so I'm wanting something more spacious.

So my strategy is, when my Dianella IP has risen in value and its a good time to sell (at the right time of the market) I will use the profit from the sale to help with the holding costs when i move back to my highgate property. I'll also fix the loan for 3 years at 4.8.

I was really wanting to invest and live in Mt Lawley but I just think its way too expensive. Mount Lawley villa's (groups of 8 - 10) ask pretty much the same as some houses, duplex, triplexes in Inglewood.

Anyhow its all about compromise. If you want the Mount Lawley location you are either going to have to buy something smaller than what you'd hoped or go a bit further out so you can buy something bigger with more land content. I'd like to have a bit of land content, a nice courtyard, entertaining area. It would be nice to have a property that is fairly new although an older property and renovated is still good. I just want something where I dont have to worry about maitenance/repairs because of the age of the property. If I can get something in a group of less than 3 would be good as there will be no strata fees too.

I'm still a bit torn though on whether to go for the Mount Lawley location and get a villa in a group of 10 with a bit of a courtyard or something larger like a duplex in Inglewood.

Any advice? :)

Oh and I forgot to say, I was really quite shocked to learn just how much i'm able to borrow, not that I'll borrow the full amount or anything though.
 
I must be getting confused, though I was sure you mentioned that the next purchase needs to be cash flow neutral/positive as you can not afford any negatively geared properties??


Cheers
MTR
 
I must be getting confused, though I was sure you mentioned that the next purchase needs to be cash flow neutral/positive as you can not afford any negatively geared properties??


Cheers
MTR

Women and their decision making, eh? :p

Alex - Considered living somewhere a bit more conservative and using the balance for investing?
 
I must be getting confused, though I was sure you mentioned that the next purchase needs to be cash flow neutral/positive as you can not afford any negatively geared properties??


Cheers
MTR

Hi MTR :)

I've changed tack. I'm going for capital growth now. I think I'll be able to afford it if I sell my Dianella unit. :) This is all guesswork though. I'm just assuming. Im thinking if I can get at least $70 k profit for Dianella plus i'll have at least $40 K in savings by then too so thats around $110 k in savings plus mb has also created a special $20 K split loan for personal use. I'm sure that $100 110k will help get me through a few years.

I had my initial consult with my mb so I've just got the ball rolling. I was actually quite shocked to learn the amount I could borrow, forgetting that according to the bank i'm on a $92 K salary :) I'm yet to visit my accountant. I'll be making an appointment soon. Until I see my accountant I wont really know exactly what I can afford. I'll get her to calculate based on a $550 k loan and a $650 k loan and breakdown all the expenses.
 
Women and their decision making, eh? :p

Alex - Considered living somewhere a bit more conservative and using the balance for investing?

Well thing is you get to a point in your life when you want something that is bigger than a shoe box lol. So I'm planning for the future (not tomorrow) but in 5 - 10 years down the track i'll have some good capital growth from my highgate property and the new (mt lawley/inglewood) ip. I'll move into my latest ip and the rents from my highgate property will help pay for the mortgage. Also my pay would have gone up as well.
 
Maybe I need to revisit my strategy. I was reading this topic from a few weeks ago.

As I said in my original post. I am torn and have been confused.

Mt Lawley unit - going to start looking

Maybe I would be better off buying something like this close to the action. Its smaller, more affordable and it would mean I'd be able to invest again sooner rather than later compared to if i bought something for $600 K+ as it wont be as negatively geared.

2 bed unit close to the action - near the corner of Walcott and beaufort street - storthes st

Maybe I should just concentrate on investing first and not worry about my dream ppor just yet. Actually come to think of it, my number 1 priority overall is location so I reckon I myself would enjoy to live close by to the centre of Mt Lawley! If I'm able to get something with a little courtyard as well that would be good too but its not the most important thing. I'd have to take into account strata fees, and repairs if its an old building.

Oh i'll be back later, long island medium is starting :D
 
Alex, never a dull moment with you, keep the thoughts rolling:p

The Strothes unit is in a very good location, surrounded by magnificent homes and opposite a beautiful park, you get to see the sky works from this park.

Keep looking, keep thinking:)

I really like this, not in your price range, but great location and bonus of adding value/calving the block.

http://www.realestate.com.au/property-house-wa-north+perth-115831275

If you start looking at units don't get hooked on just Mt Lawley there are plenty nice areas, close to the city such as North Perth, Mt Hawthorn, Maylands etc. Perhaps another option is to look at period homes where the land has been subdivided and you get to keep the front property, I have seen some for around $700K in North Perth and Inglewood, you get some land, however on the flip side there is more maintenance.

Food for thought
 
My total income (including rental) is $92 K pa. MB says the highest I can go is a $700 k loan.

Oh and I forgot to say, I was really quite shocked to learn just how much i'm able to borrow, not that I'll borrow the full amount or anything though.

This sounds strange. You can't just take the income side, the calc should include the interest you have to pay. Usually, the interest rate applied by the banks in the serviceability calcs is higher than the current variable rate.

Even if you were on a 92k salary package, with no other debts, 700k would be very hard to service.
 
Alex, never a dull moment with you, keep the thoughts rolling:p

The Strothes unit is in a very good location, surrounded by magnificent homes and opposite a beautiful park, you get to see the sky works from this park.

Keep looking, keep thinking:)

If you start looking at units don't get hooked on just Mt Lawley there are plenty nice areas, close to the city such as North Perth, Mt Hawthorn, Maylands etc.
Food for thought

Only thing with looking at units in lots of suburbs is there is a lot of work researching. You have to know your values or are they all about the same that distance from the cbd?

I think its best I focus on just a couple of suburbs. I'm pretty familiar with Highgate too, so I could focus just on Mount Lawley and Highgate.

What do you think of Inglewood for locaton? For a unit ?
 
This sounds strange. You can't just take the income side, the calc should include the interest you have to pay. Usually, the interest rate applied by the banks in the serviceability calcs is higher than the current variable rate.

Even if you were on a 92k salary package, with no other debts, 700k would be very hard to service.

How about $550 k. Do you think i'd be able to service $550 K ?
 
How about $550 k. Do you think i'd be able to service $550 K ?

IO Repayments on $550k are $2290 a month at 5%, more if/when they increase in the future. If you earn about $5K a month, thats a fairly hefty share. Especially if you're holding negatively geared properties that reduce that $5K even further. Or am i missing something?
 
I'm yet to visit my accountant. I'll be making an appointment soon. Until I see my accountant I wont really know exactly what I can afford.

Alex, feel free to ignore my advice, but you don't need to see an accountant for anything except to manage tax return affairs. You really need to calculate for yourself what you can and can't afford based on where you consider interest rates to be heading, rental estimates and your living expenses/budget. never assume capital gain in any equation.

If you can't do these things on your own I would stay away from these investments worth 100's of thousands of dollars, you could get into a lot of hot water.
 
thanks for all the replies. I probably got a bit over excited there for a while and wasnt thinking it all through. As a low income investor I really need to be as close as I can get to neutral cashflow. This time around I'm planning to achieve neutral within 3 years if possible and invest again in 3 years time.

I think I'm going to stick with what has worked for me in the past. Although my Highgate property is just a studio it has done well for me CG wise, (around $100 K growth in the last 2 years) rental demand has been strong, and decent rental returns.

I'll be looking for > 50 sqm 1 and 2 bed units in Mount Lawley, Inglewood and Highgate as these are areas im very familiar with. I'll be buying at the low end of the market and I dont think you can go wrong investing in these suburbs so close to the city.

I'll have to buy a unit in a complex that is not too run down. I'll be reading the minutes of the last two years to see what works are planned. ie any upcoming repairs and or issues. I also need to look at strata fees and reserve fund fees, no pools or lifts etc.

I think i'll also attend rental home opens too and get a feel for things.


Maybe something like this one

53 sqm 1 bed in Storthes street, close to the corner of Beaufort and Walcott Street. Rates are $650.34 per quarter

http://www.realestate.com.au/property-unit-wa-mount+lawley-115267319

The 2 bed units are 62 sqm in size.
 
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I'll be looking for > 50 sqm 1 and 2 bed units in Mount Lawley, Inglewood and Highgate as these are areas im very familiar with. I'll be buying at the low end of the market and I dont think you can go wrong investing in these suburbs so close to the city

My personal feeling was that these areas have already increased a lot recently and probably wouldn't have as much growth as other units in different central areas of Perth.

Why do you think they will be good CG in the future?
 
My personal feeling was that these areas have already increased a lot recently and probably wouldn't have as much growth as other units in different central areas of Perth.

Why do you think they will be good CG in the future?

ah ok, so you think I may have missed the boat in these areas in regards to short term growth? You could be right there. hmmm maybe its not sustainable ok


Why do you think they will be good CG in the future?

In the long term future yes I think there will be good CG. Just going by past history and the location.

I've been looking at past sales figures for the last 2 years and there has been a lot of growth already in those areas. Maybe what I should do is buy some reiwa sale figures of other suburbs to see what kind of cg they have had over the past couple of years and go from there.

What do you think of Tuart Hill? There are some 2 bed units on North Beach Drive in the mid to high 200's. Looks like a pretty undervalued suburb ? Maybe Tuart hill is due for some growth. I dont understand why those units are so cheap. Tuart hill isnt far from the city.

Maybe I should look into Baywater. I dunno.

Does the growth usually start inner city and then growth starts happening in the middle ring next ?
 
Maybe I should look into buying a Bayswater villa for my next PPOR. Villas are far more affordable in Bayswater than in Inglewood or Mount Lawley. Asking prices are around $350 k - $400 K

This one is a 3 bed villa asking $399 K

I'd like to live close by to the train line so I can ride my bike along the cycle path. It could be a good investment too, before I eventually move in sometime in the future.
 
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