Buy to live in now or rent it out. Advice please

Hi eveyone.

I?m looking for property investment advice please.

My Situation is:
I?m 40yo female.
I live in Sydney so we are talking Sydney (coastal) prices.
I own a unit, lived in it for 4 years, have rented it out for 3 years while I pay rent elsewhere.
I have approx. 45% equity in that property
I also have approx. $400K in cash, which is part offsetting that property, part tied up, but available when I want it.
I would like to buy a house, but don?t mind if I live in it now or not. I?m quite happy where I?m renting. But would like to live in it eventually.

The questions I keep asking myself and don?t have the answers yet are:
A) Do I keep my unit, given I have so much equity in it?
a. At the time of renting it out, I didn?t know what I know now, and I should have changed that before I rented it out. It?s currently interest only with over ? the balance of mortgage offset.
b. This is a great unit to retire in, so keen to keep it for that reason.
c. It?s in one of Sydney?s top beach suburbs.
d. Am I better of selling this one and buying another unit with the minimum investment deposit etc., so that my tax situation is better in the long term?
e. I have another 3 years before Capital Gains tax kicks in on this place.
B) Do I buy a house to live in or to rent out?
a. If I live in it, I know that any cash should go into this, on offset or redraw.
C) Do I buy a house and rent it out?
a. This gets me in
b. It uses the cash I have, so it?s working toward something
c. I would want to buy a house I would like to live in later on.
My gut tells me I can do this and then buy a 2nd investment unit in 5 years or so.
So if anyone has any good advice or can recommend and independent advisor who I can pay for an hour or two of their time to discuss this, and this only. I?m not interested in shares, I?m not wanting a mortgage broker, and I?m not wanting to get into any schemes. This eskimo doesn?t need any ice!

Thank you in advance.
 
Talk to one of the excellent mortgage brokers on here, provide them all the relevant numbers (income, expenses, property value) and info and create a plan*

It sounds like you're in a very nice position and probably able to take a lot more action than you'd be comfortable with. $400k cash and a half-paid-off property could do wonderful things.

*I know you said you don't want a mortgage broker. But you also asked for good advice.
 
Maidenvain,

I agree with you that it's best to make your own decisions in a way that suits yourself with a little help from experienced investors on a forum such as this. I believe this forum is intended as a site to ask questions and get genuine feedback from other investors.

You have a similar kind of 'strategy' to me though your unit is in an exceptionally good area. I'm guessing it wasn't cheap. I would keep it as the hard work is over now. You also mentioned that it would be a good place to retire.

I understand wanting a house as well - to live in, that is. Would it be in Sydney? Would it be a blue-chip area?

You mentioned buying another unit. Why not stick with a winning strategy.

Maybe I'm projecting but it seems to me that you're sensible and could make a few more purchases in your own time-frame, keeping things manageable. Have fun.
 
Last edited:
Is the reason you don't want to speak to a broker because you already have one, or because you don't trust them? We're not all bad ;)

I would recommend chatting to a good broker (heaps of great ones on here if you don't already have one) who will talk about your goals and help you come up with a plan. It will probably be free. They'll also be able to tell you what you can borrow - that's probably the first step, although it doesn't sound like affordability will be a problem.

We really can't tell you what to do without having a good chat to you but for what it's worth I'd be inclined to look at keeping the current property, especially as you have 3 years until ctg kicks in. But that's based on my strategy, not yours, hence the need for a conversation.
 
Last edited:
Thanks all for your responses.

I suppose i didn't think a broker could really help me with strategy, structuring and tax all at the same time, but seems I was wrong.

What im thinking now is use the equity in the unit to buy another IP unit.

Then use the cash i have as deposit on my house. Yes it will still be in a blue chip area.
 
While a broker isn't (usually) licensed to give tax advice, if they invest themselves they often have a pretty good handle on it and can make sure your financial structure is as tax effective as possible.

Your plan sounds sensible - use debt to buy investments and cash to buy homes. BUT if the new PPOR might eventually become an IP, is best to use the minimum cash (20% to avoid LMI) and put the rest of your cash into the PPOR offset account.
 
Have a good read of the finance section of the forum and you'll see that there are a lot of brokers who know their stuff. You can learn a lot just from reading.
If you choose to contact a broker, it might be a good idea to have a look at who provides good service and who doesn't by scouring some of the threads.
Maybe you could have a few discussions with them. I reckon you should have a 'strategy' for this. Interview a few before you decide whether to go further or not.
 
Back
Top