Looking for ideas to support lifestyle change

[mindi]

In 3 years, my children will be sufficiently independent to allow my hubby & I to "hit the road". By then we will own our current home, but it will be too big for us when we are ready to put down roots again, so we plan to sell it (current value approx $600K). We would like to invest in a (?) couple smaller properties & possibly keep a unit as a base to return to & leave some possessions in.

Does anyone have any ideas/suggestions as to how to do this with the best financial outcome? We plan to work part-time but don't want to be putting alot of $$ into keeping the investments going.

Should we pay 100% on our "future" home & the split the rest amongst the other properties? or is there a better way to manage the money we will have?

Should we rent out the "future home"? but then we'll have to pay for storage.

thanks in advance

Mindi

 

[jrc77]

In 3 years, my children will be sufficiently independent to allow my hubby & I to "hit the road".

A couple of questions:

How long do you plan to "hit the road" for? Are you talking months or years?

You mention a unit as a base while you are hitting the road - any idea of what this unit would cost (approx)?

When you do come back to "settle down", would the unit above be satisfactory or are you then after another place?

Jason

 

[Belu]

whatever you do above i would recommend buying the unit outright and then borrowing against it for investments - speak to an accountant but i believe this will make all the interest deductible.

 

[alexlee]

Assuming you sell the property for 600k and buy a 200k unit, that leaves you with 400k of investment property. That will only generate about 15k net income, and that's assuming a decent yield. If you gear it, the cash returns get worse.

You'll need other income sources to live off.

If 15k isn't enough, you might consider starting to invest now, hold the travelling thing for a few years while you build up enough to live off.

The risk is that you run out of money in 10 years or whatever when you don't have the ability to go back to work.
Alex

 

[JulieW]

Interesting topic and more thoughts.

Is there anywhere to check rent returns by suburb (on assumption that house value doesn't always reflect rental return).

This would of course be the main driver for this circumstance, since capital growth would be second to rental return.

 

[Sheryn]

1. I'd be buying the rental house or unit now (with room to put shed in back yard that you can access from off the road to store your things without disturbing tenants).

I would only put enough deposit into the property so that rent covers holding costs.


2. At present you can invest cash at Westpac for 5 years at 8%.

400K @8% = 32K per year.

How much is your super accounts & how old are you?

Can you afford to buy a cheap duplex eg 2 bedrooms in each unit, would your kids rent these?


Regards, Sheryn

 

[Aaron Sice]

put $400k into a property development company/trust or term deposit.

save.

then travel.

 

[HandyAndy888]

If you're looking to dump your stuff, why not just get s hipping container home ($30,000)??? While you're at it, buy another one for larger storage ($3000).


Makes sense to me..buy a block of dirt in a small town, dump the two containers, connect services and ta-da!!!!!

 

[RumpledElf]

I'll sell you my old house for $80,000. Heck, you can haggle me down. Its very central in Australia

Big solid stone house all tarted up with new almost everything, nice and close to the Flinders Ranges! 200km due north of Adelaide on the Broken Hill road.

Comes with free tenants. Positively geared at that price. Do what you will with them. Would need security grilles on the windows if you wanted to use it as a storage place though, but the same can be said for loads of locations, city and country.

*takes spruiking hat off and goes back to sleep*

 

[tv2]

Hi,
How big is your current block of land?
Do you have side access?
Could you fit in a granny flat?

Granny flat costs around $50-$60K, (check your council for approval first). It's a cheaper option. This could be an option for you to move into the granny flat, rent your house for regular income.

I suggest that you write down all the options and see what suit best for you.

cheers

 

[bene313]

You could:

1. Sell the house
2. Buy the unit for 200k
3. Use the 400k to buy into a higher yielding investment than resi property.

 

[bene313]

You could even put your stuff in storage, cost of say $50 per week. That frees up the entire 600k, buy an asset yielding 10%, there's your 60k pa travel allowance.

 

[tv2]

Also keep in mind that when you sell your home, you will have to pay your agent commission & solicitor costs (you sale your house for 600K, but the cash on hand is not $600K). When you buy another property, you will pay stamp duties & solicitor & moving costs. So remember to account for additional costs in your equation too.