Hi Everyone, this is my first post after having been reading SS forums for a while.
I have been going round and round in circles driving myself crazy as to how to proceed and have decided to see if any of the experienced property investors on SS can give me some advice after reading the Ozperp interview where she(?) recommends putting out your circumstances to the forum if you are at a loss how to proceed.
Our goal is to get to a point of financial independence and semi-retirement ASAP.
Our circumstances are as follows;-
PPOR(3x1) – Value approx $450K with IO loan approx $160K (with approval for drawdown up to $400K) with offset account (debt is fully deductible)
IP1 (3x1) – Value approx $400K with IO loan approx $310K rented at $360 pw
IP2 (4x1/2 )– Value approx $600K with IO loan approx $470K rented at $370 pw (rented below market value to family member).
The IP’s are both within 10-12km of CBD. Loans are all with separate lenders and we have no personal or undeductible debt.
Therefore overall LVR is about 65% but we are Cash Flow (-ve)
IP2 is on a corner subdivisible block with possibility of retaining existence house and getting a green title block with own street frontage. I estimate sub-division costs would be approx $30-50K. The subdivided lot would be worth approx $300K and existing house value would become approx $450,000 with no change to amount of rent.
I do not believe that our PPoR would be suitable to be rented as it is on a large block with lots of gum trees and pool ie too much maintenance.
Now where I am going round and round is whether to leave everything as is and patiently wait for capital Growth or whether to get things moving again with either more purchases or subdividing and selling or subdividing and building.
Like I said for some reason I feel like we are getting nowhere and sometimes I feel like it is all too much bother and selling up everything and living in our PPoR with a bit left over in the bank but maybe I’m just too impatient. Below are some of the options which endlessly go round in my head and I think my calculator keys are wearing out
1. Subdivide IP2 and sell off block paying down debt or buy another IP
2. Subdivide IP2 and build townhouse to rent out probably at around $420-450 pw
3. Do 1 or 2 above and then buy another IP
4. Sell PPoR move into IP2 and renovate and then subdivide as above and either remain in existing house or move into new townhouse.
5. Leave things as they are and go out and purchase another IP elsewhere….this would increase our LVR
6. Do nothing
7. Buy shares instead etc etc etc
Hope you get the idea I am probably over analysing. I am sorry for such a long-winded first post but wanted to know what you would do?
Thankyou in advance for any responses
I have been going round and round in circles driving myself crazy as to how to proceed and have decided to see if any of the experienced property investors on SS can give me some advice after reading the Ozperp interview where she(?) recommends putting out your circumstances to the forum if you are at a loss how to proceed.
Our goal is to get to a point of financial independence and semi-retirement ASAP.
Our circumstances are as follows;-
PPOR(3x1) – Value approx $450K with IO loan approx $160K (with approval for drawdown up to $400K) with offset account (debt is fully deductible)
IP1 (3x1) – Value approx $400K with IO loan approx $310K rented at $360 pw
IP2 (4x1/2 )– Value approx $600K with IO loan approx $470K rented at $370 pw (rented below market value to family member).
The IP’s are both within 10-12km of CBD. Loans are all with separate lenders and we have no personal or undeductible debt.
Therefore overall LVR is about 65% but we are Cash Flow (-ve)
IP2 is on a corner subdivisible block with possibility of retaining existence house and getting a green title block with own street frontage. I estimate sub-division costs would be approx $30-50K. The subdivided lot would be worth approx $300K and existing house value would become approx $450,000 with no change to amount of rent.
I do not believe that our PPoR would be suitable to be rented as it is on a large block with lots of gum trees and pool ie too much maintenance.
Now where I am going round and round is whether to leave everything as is and patiently wait for capital Growth or whether to get things moving again with either more purchases or subdividing and selling or subdividing and building.
Like I said for some reason I feel like we are getting nowhere and sometimes I feel like it is all too much bother and selling up everything and living in our PPoR with a bit left over in the bank but maybe I’m just too impatient. Below are some of the options which endlessly go round in my head and I think my calculator keys are wearing out
1. Subdivide IP2 and sell off block paying down debt or buy another IP
2. Subdivide IP2 and build townhouse to rent out probably at around $420-450 pw
3. Do 1 or 2 above and then buy another IP
4. Sell PPoR move into IP2 and renovate and then subdivide as above and either remain in existing house or move into new townhouse.
5. Leave things as they are and go out and purchase another IP elsewhere….this would increase our LVR
6. Do nothing
7. Buy shares instead etc etc etc
Hope you get the idea I am probably over analysing. I am sorry for such a long-winded first post but wanted to know what you would do?
Thankyou in advance for any responses