Afternoon all...
My first question on the forum, so here goes...
My sister has chosen her first home (a town house) in a suburb near Parramatta. It's just a few streets away from home, so we're comfortable with the area, and infact think that this suburb is becoming expensive by the day - and may become unaffordable in no time.
The issue is, the property is leased at 280 pw while it should be getting atleast 330 - 340 pw (leased until October 2010). Being first home and getting the grant means that we need to hold the property for 6 mths within the first 12 mth period - so that effectively means that as soon as the lease expires we need to hold on to it (whent the interest rates would be higher). In the first 10 mths we would have to put in about $450 - $500 towards the mortgage - which would've been around 250 -350 had the property been leased at market rent.
The rent which we would miss out on the 10 mth period is around about $2,000... and hence a loss due to extra repayments from pocket, plus the 6 mth period we would have to hold the property prior to renting it out again. However, we would be getting the property cheaper as it appears there aren't that many offers for it, ours being the highest (which is 19K less than the advertised price) due to the lease issue.
Is this a very short term view? Just looking at it financially... I've also purchased a property (just waiting on final bank approval!) which is required to be held as PPOR due to the grant...My sis and I are doing this as a team.
Please advise based on the wealth of experience we have on this forum.
Kind regards
Monalisa
My first question on the forum, so here goes...
My sister has chosen her first home (a town house) in a suburb near Parramatta. It's just a few streets away from home, so we're comfortable with the area, and infact think that this suburb is becoming expensive by the day - and may become unaffordable in no time.
The issue is, the property is leased at 280 pw while it should be getting atleast 330 - 340 pw (leased until October 2010). Being first home and getting the grant means that we need to hold the property for 6 mths within the first 12 mth period - so that effectively means that as soon as the lease expires we need to hold on to it (whent the interest rates would be higher). In the first 10 mths we would have to put in about $450 - $500 towards the mortgage - which would've been around 250 -350 had the property been leased at market rent.
The rent which we would miss out on the 10 mth period is around about $2,000... and hence a loss due to extra repayments from pocket, plus the 6 mth period we would have to hold the property prior to renting it out again. However, we would be getting the property cheaper as it appears there aren't that many offers for it, ours being the highest (which is 19K less than the advertised price) due to the lease issue.
Is this a very short term view? Just looking at it financially... I've also purchased a property (just waiting on final bank approval!) which is required to be held as PPOR due to the grant...My sis and I are doing this as a team.
Please advise based on the wealth of experience we have on this forum.
Kind regards
Monalisa