Advice/opinion/guidance wanted!!!

[Sdelectrix]

Hi everyone, I need your help. I'll try explain... my wife and I have decided to use the equity in our house in Albury NSW for a deposit to either buy or build another property (house, not unit). We bought the house a few years ago as our PPOR but have since moved to Darwin so its currently being rented, and we have roughly $40k in accessible equity.
We have been researching and tossing up several investment options, but are lacking in some more experienced guidance as to what are some pros/cons to our options that we either aren't aware of or havent thought of.
So our potential options are:
1. Buy an existing property in Darwin (budget $600k) and anticipate short term CG. Live in initially to avoid paying CGT
2. Buy or build in Palmerston using same theory as above, but will save on stamp duty if building
3. Buy existing property back in Albury/Wodonga (budget $250-350k) hope for good yield for long term investment
4. Buy 2 "cheapies" in Albury/Wodonga, using same theory as above
5. Build Duplex in Alb/Wod or Thurgoona (close to uni), possibly sell one side, rent out the other
So I guess I'm looking for two types of advice here: Real estate/property investment advice e.g. thoughts on locations and whether to buy or build; and also financial advice e.g. is it always better to start small and gradually increase budget as opposed to going for higher price/higher risk markets for our first property??
I can go into some more detail for each of my potential plans if anybody is interested enough to offer advice.
Thanks in advance to everybody for their help!!!!
Sam D

 

[D.T.]

Those options are very dissimilar, what do you hope to achieve and over what time frame?

 

[Sdelectrix]

Well my (ameteur and inexperienced) logic is that Darwin/Palmerston will be more likely to have short term growth, and that Albury/Wodonga would be a better long term investment, so my original thoughts were to buy/build in Darwin and then theoretically use the equity available after 1,2 or 3 years to invest in Albury.
But I have read a fair bit of negative outlook for the NT lately so was thinking that as much as I think that there is growth potential for the NT maybe its not worth the risk and maybe it'd be safer just to put our money into something cheaper, as its our first investment move and dont want it to be a failure.

I guess I'm just hoping somebody much wiser than me could put themselves in my shoes and let me know their thoughts.

Thanks again, Sam

 

[china]

Well my (ameteur and inexperienced) logic is that Darwin/Palmerston will be more likely to have short term growth, and that Albury/Wodonga would be a better long term investment, so my original thoughts were to buy/build in Darwin and then theoretically use the equity available after 1,2 or 3 years to invest in Albury.
But I have read a fair bit of negative outlook for the NT lately so was thinking that as much as I think that there is growth potential for the NT maybe its not worth the risk and maybe it'd be safer just to put our money into something cheaper, as its our first investment move and dont want it to be a failure.

I guess I'm just hoping somebody much wiser than me could put themselves in my shoes and let me know their thoughts.

Thanks again, Sam

Why do you think that Albury has good long term growth prospects? Are there any good drivers of capital growth? Any new industries going there that will bring population growth? It is a university town essentially and this will usually mean that it is good for some yield but not necessarily growth.

 

[Spades]

Hi Sdelectrix,

Merry xmas m8

I'm no expert but imo your $'s would be well spent in NT in the interim.

Educate yourself,network and ask questions.

Good luck with whatever path you choose/take.

Cheers Spades

 

[JacM]

Hi Sam

It sounds to me like you need to have a chat to a financial planner to look at where you are financially, what resources you have, where you aim to get to, and the most appropriate method of reaching the goal.

If you start with an expensive property, you may find it doesn't fetch enough in rent to cover costs, so you'll have to stump up the difference. This makes it harder to get finance for the next property and the next. So be careful with this strategy, and if you decide this is the strategy for you, it is really really important not to get it wrong. There is no shortage of people crying over spilt milk, having opted for this strategy, and then having less years of their working and money-earning lives to fix it.

Define the end goal first, and pick the investment strategies (and accordingly, the properties) that will get you there.

 

[Sdelectrix]

Thanks everybody, and I hope everyone had a great Christmas!
So the reasons I like Albury-Wodonga are:
It has over $1 billion in developments spread over several different industries which are either underway or have been approved.
And since I bought my house there 3.5 years ago prices have risen modestly but steadily and are still cheaper than similar sized regional centers. I think that because of this and in combination with rapidly rising city prices and with Alb-Wod well placed on the Hume Hwy between Syd and Melb, it could attract a lot of city families who wish to escape.

I think a meeting with a financial planner is definitely in order, cause to be honest I also lack in direction and goals. Being reasonably young (27) I am in no hurry to take huge risks or invest beyond my means, I just want to know that my future family, and then my wife and I in our retirement, will be financially secure.

Thanks again!!!!

 

[Spades]

Hi Sdelectrix,

Are you relying solely on the 40k equity?Or do you have savings as well to go towards deposit/costs etc?

Cheers Spades.

 

[Sdelectrix]

Hi Sdelectrix,

Are you relying solely on the 40k equity?Or do you have savings as well to go towards deposit/costs etc?

Cheers Spades.

Hi Spades,
Got the 40k equity + about 10k savings, but have recently got a new job which will allow be to save $1500 a week if I need to, so in a few months could have quite a substantial deposit.
Cheers Sam.