House or townhouse

Decision decision. We have the opportunity to buy my parents four bedroom home plus study on 650 m? of land. They will sell it to us for market Value, but will help us by lending us the deposit right now so we can secure a loan before changes to mortgage lending criteria and to tide us over till we sell a piece of property to pay them back. It is in a suburb which is now seeing the older people moving out and young families moving in and renovating. The prices there have been stagnant for a long time but slowly starting to move upwards.

To buy it we would need to sell a two bedroom townhouse which is cgt free for one more year. It rents well. The capital growth is nothing like what houses in the same suburb has been, so we think that houses in the inner areas are better. Eg a friend bought a house for same price and same time as our TH. Hers has more than doubled in value. Our TH just half way to doubling. Plus more units being built means less demand for TH.

So to buy or not to buy the parents home? My biggest reason against buying it is that there would be more maintenance issues with a house than a townhouse. The TH is largely set and forget. But also we sink BC fees in to do so. But in terms of capital growth we predict that the house will steadily increase as pressure on inner suburbs pushes prices up. townhouse is already renovated so no more value to add. This house needs cosmetic Reno but could rent as is. Plus it could be split into two apartments with some work because there are two levels.

My other reason against buying it is if we were to buy another investment property we would not to choose that property. We would have chosen units or something with a dual income straight up as our strategy is for CF+ from day one.

Their house n our TH are worth the same amt. so we'd lose on buy/sell costs, but we predict CG will go higher on house than TH in next 5 years.

So....do nothing...or: sell TH and buy theirs....or: sell TH and buy something else.
Thoughts welcome!
 
We already used up all the equity earlier to buy another IP. The idea of the parents home is it wold be our own family home in the future.
 
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