IP/PPOR which way would you swing?



Firstly, greetings all ~ I've been lurking and reading like an addict during every possible moment of my life ... Thank you to all who have posted and shared and given advice ~ it has been incredibly informative and I can now do math a great deal better than I could before!

So this is my story at present ...

I have a unit in Bankstown Council area which I bought at the end of 2007 for $170K ... I could get between $300-350 rent for it in todays market ... My strata is quite low at $1200 roughly a year ... With the increased value (some due to work and some due to just because) increase its worth roughly $250K ... I've got $51K equity being redrawn to finish a few small things (built in to main bedroom and possibly second room but not sure because its not too large to start with ... I still owe $164K ...

I want to buy another property while I can ... I'd ultimately like to have a decent portfolio which will ultimately suplement my income ~ as many of us want to do! I'd like to buy houses and then whack on granny flats detached or attached ... and get double income ultimately .... but it depends upon the properties I end up buying ...

I want to start with one ... you have to start somewhere .. and then see how I go! ... I'm looking in the Blacktown and Penrith Council Areas ... I've been attending open houses, chatting to agents, reading, watching, reading more, doing sums and rah rah rah ... books, google, realestate stuff ... whatever I can get my hands on!

My budget will be around $250 even though they may lend me $270K plus my $51K ... But I am definitely not using it all ... I'd like to of course get a bargain and I am researching a property's historical price plus the work that has been done or not done to it ...

There have been properties that have really made me rethink things and have given me really awesome renovation ideas! And I am greatly enjoying the chase/hunt ... (although I did NOT enjoy the realestate agent dirty old man who called me on Sunday morning starting at 7:30am but stopping just before 9am ... like I need heavy breathing and maniacal laughing to start my Sunday ... Like I wouldnt recognise his voice/accent even though he tried to disguise it by making it deeper *massive-eye-rolling*)

So ... As I live in my 2 bedder with 33 stairs from my car space to my front door ... with 1 cat and a foundling kitten, 2 house rabbits, 2 cockateils and the foundling rainbow lorikeet I'd like to move into a house ... with some space ... and a few stairs ... and a garden ... and maybe a garage to hide things I dont want to look at like fans in winter!

While I would ideally like to purchase a house with detached granny flat potential ... its proving a longer search to find one since many people are looking for the same thing! I've found Brazen's info priceless and I may still yet find that property ... So I'm still looking for certain block sizes and house locations on blocks so if I can't do detached granny flat, then I can maybe do an attached one if the house is the right shape ...

BUT there are a couple in the Mt Druitt area which I could get for $220ish - $250ish asking price (I havent made any offers as yet because I'm still waiting for my equity to go through and then I'll go for the 2nd mortgage for property #2 ... I know that living in it will limit where I buy because some streets/suburbs downright scare me! ... and I dont want to buy too near huge giant whopping big powerlines ...

So, is it silly to live in the house and rent out the unit? Then get a revalue and move on to the second IP? I think the numbers stack up better with the unit and its closer to neutral than the house would be ... I can deduct strata etc ... I'd be able to do work to the house if I need it ~ paint or garden or whatever ... I know that I have to take my income and deductions into consideration as well ... but I havent worked that math out yet :D

I want the space but I want to make a wise investment decision ... I HATE my current job and resigned a couple of months ago but I let my managers one and two talk me out of it ... So I've decided to make the best of my insanity of staying and get a house while I'm stuck surrounded by stupid people and children ( I like most of the kids ... just not the stupid ppl or my immediate manager who is hopeless and a source of endless calamity for me!) ... I can then find a new job closer to the house rather than my unit so I wont be doing too much commuting ~ I'm a teacher so I can work in day care or schools or even from home if the mood strikes me ...

I think its a reasonable time to buy, I'm doing this on my own finances as my significant other doesnt know what he's doing with his life and may want to move overseas which isnt my plan ... he probably wont, but I'm not waiting for him to figure out his stuff ... I'm tired of waiting for others to figure their stuff out! I want my own stuff figured out!

I just don't want to make an "emotional" decision i.e. wanting to live in the house and make a not so good investment one ... there are some houses I've seen which have been renovated which wasnt what I originally wanted BUT I figure if the floors are done the the kitchen looks good-ish and they've whacked on lots of air con units then it means I don't have to do it and I may still be able to bag a bargain ...

I am looking at properties for example that may have sold in 2008 for $220K and they are now trying to sell them for $270 or so ... I will offer perhaps $250 or less ... Not sure if this is clever or not ... whether you think I should go more the ugly ducklings with cosmetic issues and less the not-so-ugly ducklings!

This post has ended up quite sizable! Time for me to stop!

So ... what ya reckon?

 
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