Hi everyone,
This is my first post here after lurking and reading for some time, so please bare with me!
I am just looking for some general advice on my financial position and where to go with my investment property.
My de-facto partner and I bought our first place in October 2008 when we were both 21. 2 bed 1 bath 1 car space unit for $170,000 (our original loan was for $162,000) P&I loan. The unit is in a regional CBD area 5 minutes away from a major hospital, railway, schools, shops etc We got the first owners grant of $7000 at the time. We moved in as our parents wanted us out (lol!) and we lived there for nearly 2 years. The unit complex is an old place, the strata is very high ($677 per quarter) as they are trying to develop the complex and modernise it. So far they have replaced the entire roof and built a new carport.
We ended up moving back home in February 2011 as I lost my job/quit uni and my partner hurt his back, and his job decided to squeeze him out. We didn't have a lot of savings so we burned through it quite quickly and ended up using our credit card and taking personal loans from family. We renovated and replaced our kitchen which had been falling apart when we moved in and was infested with cockroaches. We finally were able to rent out our apartment in May 2011.
Since May 2011 I've had reliable tenants in there that are happy and are always on time with their rent. I currently rent it out at $275 per week.
My issue is, my partner lives at home with his parents currently and I live with mine currently. My partner recently secured a full-time job after many bumps and boulders along the way, and I believe his salary is around $38,000 before tax. I, on the other hand, have been unemployed for just over a year due to mental illness. We would really like to move into another home. A house preferably, but we've only just started to take control of our lives and financial situation again after our hiccups in the past 3 years.
Our debts are:
$18,500 car loan (VARIABLE @ 10.180%)
$6,500 family loan (interest free)
$900 store card (2.5 years remaining on this, I've been paying more than the minimum and putting extra money towards this when I can. Currently not paying any interest as it's still in the interest free term)
We also have a credit card with a $3,000 limit but we always pay it off in full every month, we've never paid interest on this or ever had it maxed.
Our home loan is with St George. It's a really basic no frills loan, P&I, $154,000 remaining and 6.36% pa (but it's due to go down again).
We also have a compound-interest savings account, we currently have just over $2,000 saved thanks to our efforts to squirrel away money each month for the last few months. We needed a small buffer because what would happen was: an emergency would come up > we'd use credit > we'd end up having to pay it back and it felt like a cycle over a few years of this.
I have asked my bank if I could switch my P&I loan to an IO loan but it will cost me around $600 upfront to change. I think this is due to the type of basic loan we have. I know I can claim that money but $600 upfront at the moment for us is a bit.
Basically, we would eventually like to use our apartment to leverage into a house in the near future. But for the next year or two, I think we'll be living at home and paying off our car loan (I wish to just get rid of this loan), our store card and I'd love to repay our family back, all the while still building a savings buffer.
I wanted to ask as well, once I change my P&I to IO for my apartment, would it best to just pay the minimum repayment of interest only each month? I have been putting a little more each month towards it (I only have a few hundred dollars sitting on top of that mortgage that I can redraw) just so I have mortgage repayments there if I need them in the future.
My partner and I have had some real rough luck in the past few years and we're working to rebuild our lives. Any advice is appreciated or suggestions or anything. We'd like to be living in another house sooner rather than later. We don't even mind if it's a run-down little place, we're both fairly handy when it comes to DIY. We'd eventually love to keep buying investment properties!
Oh and also, we don't spend a lot on ourselves. Hardly ever go out, don't really consumer shop. Haven't even been on a holiday!
This is my first post here after lurking and reading for some time, so please bare with me!
I am just looking for some general advice on my financial position and where to go with my investment property.
My de-facto partner and I bought our first place in October 2008 when we were both 21. 2 bed 1 bath 1 car space unit for $170,000 (our original loan was for $162,000) P&I loan. The unit is in a regional CBD area 5 minutes away from a major hospital, railway, schools, shops etc We got the first owners grant of $7000 at the time. We moved in as our parents wanted us out (lol!) and we lived there for nearly 2 years. The unit complex is an old place, the strata is very high ($677 per quarter) as they are trying to develop the complex and modernise it. So far they have replaced the entire roof and built a new carport.
We ended up moving back home in February 2011 as I lost my job/quit uni and my partner hurt his back, and his job decided to squeeze him out. We didn't have a lot of savings so we burned through it quite quickly and ended up using our credit card and taking personal loans from family. We renovated and replaced our kitchen which had been falling apart when we moved in and was infested with cockroaches. We finally were able to rent out our apartment in May 2011.
Since May 2011 I've had reliable tenants in there that are happy and are always on time with their rent. I currently rent it out at $275 per week.
My issue is, my partner lives at home with his parents currently and I live with mine currently. My partner recently secured a full-time job after many bumps and boulders along the way, and I believe his salary is around $38,000 before tax. I, on the other hand, have been unemployed for just over a year due to mental illness. We would really like to move into another home. A house preferably, but we've only just started to take control of our lives and financial situation again after our hiccups in the past 3 years.
Our debts are:
$18,500 car loan (VARIABLE @ 10.180%)
$6,500 family loan (interest free)
$900 store card (2.5 years remaining on this, I've been paying more than the minimum and putting extra money towards this when I can. Currently not paying any interest as it's still in the interest free term)
We also have a credit card with a $3,000 limit but we always pay it off in full every month, we've never paid interest on this or ever had it maxed.
Our home loan is with St George. It's a really basic no frills loan, P&I, $154,000 remaining and 6.36% pa (but it's due to go down again).
We also have a compound-interest savings account, we currently have just over $2,000 saved thanks to our efforts to squirrel away money each month for the last few months. We needed a small buffer because what would happen was: an emergency would come up > we'd use credit > we'd end up having to pay it back and it felt like a cycle over a few years of this.
I have asked my bank if I could switch my P&I loan to an IO loan but it will cost me around $600 upfront to change. I think this is due to the type of basic loan we have. I know I can claim that money but $600 upfront at the moment for us is a bit.
Basically, we would eventually like to use our apartment to leverage into a house in the near future. But for the next year or two, I think we'll be living at home and paying off our car loan (I wish to just get rid of this loan), our store card and I'd love to repay our family back, all the while still building a savings buffer.
I wanted to ask as well, once I change my P&I to IO for my apartment, would it best to just pay the minimum repayment of interest only each month? I have been putting a little more each month towards it (I only have a few hundred dollars sitting on top of that mortgage that I can redraw) just so I have mortgage repayments there if I need them in the future.
My partner and I have had some real rough luck in the past few years and we're working to rebuild our lives. Any advice is appreciated or suggestions or anything. We'd like to be living in another house sooner rather than later. We don't even mind if it's a run-down little place, we're both fairly handy when it comes to DIY. We'd eventually love to keep buying investment properties!
Oh and also, we don't spend a lot on ourselves. Hardly ever go out, don't really consumer shop. Haven't even been on a holiday!
