Hi All,
From December, I will be living rent-free for 12 months house sitting for my parents - I want to maximise the opportunity.
My IP1 generates about $400/mth in positive cashflow. Value: 550k, owes 289k (LVR 52% / ~150k accessible equity). My income is 80k.
When my parents return, I'll need a PPoR to live in (Newcastle area). Ideally something run-down in a strong growth suburb where I can add value through reno. Ideal budget 250-350k max.
Option 1
--------
- Buy a run-down PPoR ASAP.
- Commence renovation ASAP (using tradesmen to do the majority).
- Aim to complete work within 6 months and get it back on the market.
- Alternative/bonus approach would be a subdivision..
- Sell to realise profit and roll into next PPoR purchase just in time before parents get back. This way I have used the 12mths to "create equity" etc.
- My fear here is borrowing up and then trying to offload in a cooling market and not making any profit.
Option 2
--------
- Buy another IP using *some* of the equity.
- Leave sufficient equity as the deposit for the PPoR later in the year.
- This means 3 properties in total and leaving me more exposed to the expected interest rate rises and no more safe/comfy 52% LVR.
Option 3
--------
- Do nothing, wait for the market to cool further.
- Buy the PPoR just in time before the parents get back.
- Gradually commence reno work etc while living in it.
Any suggestions or advice appreciated..
(I am favouring Option 1, but please tell me what you think).
Cheers
From December, I will be living rent-free for 12 months house sitting for my parents - I want to maximise the opportunity.
My IP1 generates about $400/mth in positive cashflow. Value: 550k, owes 289k (LVR 52% / ~150k accessible equity). My income is 80k.
When my parents return, I'll need a PPoR to live in (Newcastle area). Ideally something run-down in a strong growth suburb where I can add value through reno. Ideal budget 250-350k max.
Option 1
--------
- Buy a run-down PPoR ASAP.
- Commence renovation ASAP (using tradesmen to do the majority).
- Aim to complete work within 6 months and get it back on the market.
- Alternative/bonus approach would be a subdivision..
- Sell to realise profit and roll into next PPoR purchase just in time before parents get back. This way I have used the 12mths to "create equity" etc.
- My fear here is borrowing up and then trying to offload in a cooling market and not making any profit.
Option 2
--------
- Buy another IP using *some* of the equity.
- Leave sufficient equity as the deposit for the PPoR later in the year.
- This means 3 properties in total and leaving me more exposed to the expected interest rate rises and no more safe/comfy 52% LVR.
Option 3
--------
- Do nothing, wait for the market to cool further.
- Buy the PPoR just in time before the parents get back.
- Gradually commence reno work etc while living in it.
Any suggestions or advice appreciated..
(I am favouring Option 1, but please tell me what you think).
Cheers
