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From: Mike .


home/investment
From: steventh
Date: 1/21/00
Time: 9:57:23 PM

Approx 12 months ago we purchased an investment property in an excellent location near beach etc. with a long term view of living there ourselves in the future by renovating or redeveloping the land. We have since decided that the property is too good of an investment to do the above and should leave it as it is.

We paid $145k and are receiving $205p.w. and have got fantastic tenants. The worst rent will be $185p.w. Our problem is, there is a house for sale 2 doors away from this house that we would like to buy to live in. Does anybody see that as a problem? We do have another investment property in another area and manage both of them ourselves.

THANKS FOR ANY ADVICE.

 

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Gee Cee

Reply: 1
From: Mike .


Re: home/investment
From: Gee Cee
Date: 1/23/00
Time: 7:54:22 PM

Dear Stevnenth

I guess it all gets down to what you want in life and how the figures stack up for each property.

If you really want to live in that location it is no good waiting till you are very much financially secure but not healthy enough to take long walks and swims at the near by beach.

As to financially:

Is the home you already have getting good returns and also tax deductions.

If you buy the house two doors (house 2) up for yourself will the loan you have be higher than the present properties. And not deductible.

What would the financial scenario be if you purchased the new property, rented it out (even to the tenant of house 1) and moved into the house 1 yourself ?

Which is the house you would like to live in?

I guess you need to look at the cashflows and tax losses available for the house 1 and that of the house for sale (house 2). Then balance lifestyle with it all.

At the end you should come up with the best financial proposition of the two.

You will then have to weight up which is the better house emotionally.

Happy investing & let us all know what you decide.

Gee Cee