Hi all,
I am just about to get permanent residence and I want to get in the market. I have done a reasonable amount of research and narrowed down 4 options. for the investment strategy focusing on long term (over next 10 years) wealth creation. Scenarios drawn below only relate to first year or two.
Quick Facts:
- $60k in savings
- > $120k combined net income
- First Home Buyer Grant eligible
Scenario 1:
First step: Buy a property around $500k (+/- 25k) and live in it - e.g FHBG.
Second step: Acquire 2-3 investment properties in the price range ~$200k
Note: It will be hard in the area we are looking to find a place for $500k but we would benefit from the FHBG and would have the cash at hand to get IP quicker.
Scenario 2:
First step: Buy a property around $650k mark and live in it
Second step: Acquire 2 investment properties in the price range ~$200k
Note: $650 is more in the range of properties we would like to live in but we would miss out on the FHBG and would need to save a little while before we have the cash to get more IPs
Scenario 3:
First step: Buy a property around $600k mark and rent it out. Would result in rental return of ~$550/week and hence negative gearing + tax "benefits". We would still rent a place for ~$550-$600/week.
Second step: Acquire 2 investment properties in the price range ~$200k
Note: Would miss out on the FHBG, would benefit from tax reductions due negative gearing and increase cash flow - I am not sure about the exact numbers.
Scenario 4:
First step: Buy a property around $500k mark (+/- $25k) and live in it for 6 month, then rent it out (~$500/week) while going back to rent for ~$550 to $600 a week.
Second step: Acquire 2-3 investment properties in the price range ~$200k
Note: Mix out of 1 and 3
For all scenarios I would add an 100% offset account to the first property in step 1.
I would appreciate if someone could provide advise which scenario would be the smartest and quickest considering wealth creating as priority. Please include reasons in your answer or point me to a post where something similar has been discussed - I did not see one yet.
Thank you very much - any comments are welcome and I will provide more details if necessary
Mike
I am just about to get permanent residence and I want to get in the market. I have done a reasonable amount of research and narrowed down 4 options. for the investment strategy focusing on long term (over next 10 years) wealth creation. Scenarios drawn below only relate to first year or two.
Quick Facts:
- $60k in savings
- > $120k combined net income
- First Home Buyer Grant eligible
Scenario 1:
First step: Buy a property around $500k (+/- 25k) and live in it - e.g FHBG.
Second step: Acquire 2-3 investment properties in the price range ~$200k
Note: It will be hard in the area we are looking to find a place for $500k but we would benefit from the FHBG and would have the cash at hand to get IP quicker.
Scenario 2:
First step: Buy a property around $650k mark and live in it
Second step: Acquire 2 investment properties in the price range ~$200k
Note: $650 is more in the range of properties we would like to live in but we would miss out on the FHBG and would need to save a little while before we have the cash to get more IPs
Scenario 3:
First step: Buy a property around $600k mark and rent it out. Would result in rental return of ~$550/week and hence negative gearing + tax "benefits". We would still rent a place for ~$550-$600/week.
Second step: Acquire 2 investment properties in the price range ~$200k
Note: Would miss out on the FHBG, would benefit from tax reductions due negative gearing and increase cash flow - I am not sure about the exact numbers.
Scenario 4:
First step: Buy a property around $500k mark (+/- $25k) and live in it for 6 month, then rent it out (~$500/week) while going back to rent for ~$550 to $600 a week.
Second step: Acquire 2-3 investment properties in the price range ~$200k
Note: Mix out of 1 and 3
For all scenarios I would add an 100% offset account to the first property in step 1.
I would appreciate if someone could provide advise which scenario would be the smartest and quickest considering wealth creating as priority. Please include reasons in your answer or point me to a post where something similar has been discussed - I did not see one yet.
Thank you very much - any comments are welcome and I will provide more details if necessary
Mike