How can we afford this?

We are still renting. The whole 'family home' question rears it's head every time we try to invest. We own 2xIPs resale value of $435k, $450k and total equity $220k approx.

we are increasingly frustrated on many levels with renting and feeling unsettled. So our discussion turns to 'is it time to bite the bullet and get a family home?'

We keep putting it off but 7 years on and a few kids later we are really unsettled.

There is only one home I'm interested in as a PPOR and it's complicated. It's 'over $900'. Land is 1700m2.. It has a 3br home, 20m frontage , prime land, on top of the hill. There are sweeping beautiful views from the whole block. I've loved the charm of the home for about ten yrs. it's old and land value only to any but aesthetes!

the challenge is how to fund (and hold) the purchase.

My crazy dream is to somehow buy it keeping 800m2 for now as family home. goal- Pay $450-500k for the half. Which is a very good price for that location.

Ideas so far on how to fund it:
- somehow get approved to borrow $900k and have all the subdivision arranged so on settlement a developer buys half off us. Then we have a non TD mortgage off pp of $450-500k.
- JV - purchase partnership- have an agreement in place whereby we agree to subdivide and each pay half ...
-In an ideal world we'd keep all the land and work with a dev who'd sell villas OTP to fund it and we'd keep one as IP. But
we don't see how it's profitable for us to hold the vacant land while all the approvals took place. The house is rented now for $400pw. A $900k purchase is a massive mortgage and if PPOR it would be non TD. Although in this scenario we'd rent it out til it became profitable to live there. Which then defeats the point of a family home. Plus - wd prefer to pay out the PPOR mortgage ASAP.

Any other ideas how to fund it??? We don't know anyone who's interested. We e never done development.

Ta !

Other ideas??
 
Let's see stamp duty will be over $36,000, land tax will be payable unless it is your PPOR.
What are the Section 94 fees, would you need to pay to construct a road for the rear access
Your problem will be that if you did scrape up the money to buy you will have no flexibility when contingencies/delays occur.
Having been in the situation once where I went a house too far, the stress of juggling payments etc is not worth it.
 
We are still renting. The whole 'family home' question rears it's head every time we try to invest. We own 2xIPs resale value of $435k, $450k and total equity $220k approx.

we are increasingly frustrated on many levels with renting and feeling unsettled. So our discussion turns to 'is it time to bite the bullet and get a family home?'

We keep putting it off but 7 years on and a few kids later we are really unsettled.

There is only one home I'm interested in as a PPOR and it's complicated. It's 'over $900'. Land is 1700m2.. It has a 3br home, 20m frontage , prime land, on top of the hill. There are sweeping beautiful views from the whole block. I've loved the charm of the home for about ten yrs. it's old and land value only to any but aesthetes!

the challenge is how to fund (and hold) the purchase.

My crazy dream is to somehow buy it keeping 800m2 for now as family home. goal- Pay $450-500k for the half. Which is a very good price for that location.

Ideas so far on how to fund it:
- somehow get approved to borrow $900k and have all the subdivision arranged so on settlement a developer buys half off us. Then we have a non TD mortgage off pp of $450-500k.
- JV - purchase partnership- have an agreement in place whereby we agree to subdivide and each pay half ...
-In an ideal world we'd keep all the land and work with a dev who'd sell villas OTP to fund it and we'd keep one as IP. But
we don't see how it's profitable for us to hold the vacant land while all the approvals took place. The house is rented now for $400pw. A $900k purchase is a massive mortgage and if PPOR it would be non TD. Although in this scenario we'd rent it out til it became profitable to live there. Which then defeats the point of a family home. Plus - wd prefer to pay out the PPOR mortgage ASAP.

Any other ideas how to fund it??? We don't know anyone who's interested. We e never done development.

Ta !

Other ideas??

Hi Elke, I'm in a slightly different situation than you. My first property was PPoR followed by 3 IP's. IMO It depends on your goals and expectations. If you plan to stay at the property you desire by all means go for it, but as others have mentioned it may impede your long term goals. I also want to purchase a better, larger residence for my children but I'm thinking of the longer term goals. All the best:)
 
Thank you so much for all yr comments.

This thread is not about investing per se as it's about following your heart to secure the PPOR you love... To answer the 'ambitious/risk/ blow life savings" comment above. This house n views have been in my head for years and need it out of my system! This has been my PPOR dream house -- Im sure most of us have one... The one you drive by year after year and imagine how great it would be to live there...180 degree ocean views, character home, huge land....

So the reason I'm putting it on SS is, after all these years of day dreaming, I'm trying to action it to either have success - or wake up from la la land and see it will never work. Because we wouldn't buy if too much risk, we'd only buy if we cd thoroughly minimise the risk to well within our comfort zone.

It's always the house I compare others to and then w never buy. So -- I, very grateful for all yr responses, at least I'm looking at the reality of it now. Doing. Areas feasability study. Arranging an inspection. Going to Council. Costing it out. Etc.

nothing coming up trumps yet LOL... But will continue til there's a definite answer ... :eek::D
 
If that's what your dream is i'm sure that you can make it happen.

I'd suggest looking into a JV, depending on location you may have a seasoned developer on SS that is interested. As you want it for PPOR i'm sure you could let them have a bigger slice of the pie as an incentive ;)

It can also help to keep your investor hat on when negotiating or get someone else to do it for you, you don't want the REA to know how much you want it!

Pick the brains of guys like LeoT,
Good luck!
 
There is only one home I'm interested in as a PPOR and it's complicated. It's 'over $900'.

Other ideas??

Find a place that you can actually afford without risking everything you've ever worked for? :) Surely there must be other suitable properties in a lower (affordable) price bracket?

It's too easy to get 'one-itis' and get stuck on one property only (last year I almost did the same by going for a property that though completely amazing, would have been too much of a stretch financially)

Best of luck whatever you decide...
 
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