Advice for a Novice ?

Hi all,

wondering if I could get some advice on which way to go, if you were perhaps in my shoes that is.
I currently have a property in Newcaslte that is now leased out as an IP. Over the past two years, like most property it has grown in equity. I am now renting in Sydney (due to work) and would love to buy into this market. The question is I am in a comfortable position to purchase another IP, In say Newcastle or any other cheaper market, and keep renting in Sydney or I could continue to save for at least another year then purchase a PPOR in Sydney (obviously a smaller two bedroom unit).
I am intending to live in Sydney for a few years and I supose the emotional side of owning where you live would come into it.
I realise the answer would most likely come down to the individual's decision but any previous experiance or comments on which way you would go are much appreciated.

This Forum is great, I have learnt alot already.
You're right here, Marco, when you say the reply will be up to the individual. Only you can decide whether or not you are ready to buy your own place or continue renting. Owning your own place gives you stability and peace of mind. Renting is always so precarious, and you can't do things like add a deck or put up new window coverings to your taste.

Given that the rental market in Sydney is at it's lowest for years and there are substantial savings to be made for tenants, perhaps you would be better off putting the additional dollars towards another Newcastle IP. It is fairly obvious that Sydney is on the downside of the recent boom and that the last two year's tremendous growth figures are not all that likely to be repeated in 2003-2004. (That is what all the experts are saying anyway :) )

Remember too, that any interest on your IP is tax deductible whereas the interest on your own place isn't. If you have researched Newcastle and know the area well, you are probably in a better position to buy into a suburb which may well have a better yield than a Sydney IP. Whatever you do and wherever you buy, remember to do your homework and research beforehand to ensure you buy well. Happy hunting!