I'm posting to this forum because I own 2 Sydney properties, two big mortgages, and have no head for figures. Everyone tells me I'm crazy to be in my present situation. So I'd love to hear the opinions of those in this forum - especially as practically anyone would be more financially astute than me!
Here's my situation.
I've have recently returned to Melbourne from Sydney where I was working for five years.
Point to note: I'm renting in Melbourne for $1,430 a month.
The two Sydney properties I own are both rented.
The first property, is a waterfront apartment.
Purchased in 1999 for $490,000, I owe $390,000 on it, with a fixed loan at 6.5% for 5 years. It brings in a gross rental income per annum of $21,325. Total expenses are $30,274, so there is currently an annual loss of $8,949. The apartment rents very well because of its position, but capital gain isn't brilliant: an apartment in the same building purchased in the same year as mine for $370,000 recently sold for $420,000. However, as I have minimal superannuation and it has performed shockingly, I've tended to view the apartment as my potential retirement income.
My second property is a former home - an inner city townhouse.
Purchased also 1999 for $575,000, I owe $495,000 on it, with a fixed loan at 6.85% for 5 years. It brings in a gorss rental income per annum of $27,435. Total expenses are $53,082, so there is a currently an annual loss of $25,647. The property would now be worth about $700,000+
I can service both loans, but generally can't afford to make additional repayments. I'd like to buy a home in Melbourne eventually, but am in no hurry.
QUESTION: Is my current situation working against me financially? Would I be better selling one or both of the Sydney properties and buying a Melbourne house, with a smaller mortgage, and paying that off? Or keep one Sydney property or both? I'm really confused what to do. Any advice will be gratefully received...especially as I don't possess a financial mind!
Mike L
Here's my situation.
I've have recently returned to Melbourne from Sydney where I was working for five years.
Point to note: I'm renting in Melbourne for $1,430 a month.
The two Sydney properties I own are both rented.
The first property, is a waterfront apartment.
Purchased in 1999 for $490,000, I owe $390,000 on it, with a fixed loan at 6.5% for 5 years. It brings in a gross rental income per annum of $21,325. Total expenses are $30,274, so there is currently an annual loss of $8,949. The apartment rents very well because of its position, but capital gain isn't brilliant: an apartment in the same building purchased in the same year as mine for $370,000 recently sold for $420,000. However, as I have minimal superannuation and it has performed shockingly, I've tended to view the apartment as my potential retirement income.
My second property is a former home - an inner city townhouse.
Purchased also 1999 for $575,000, I owe $495,000 on it, with a fixed loan at 6.85% for 5 years. It brings in a gorss rental income per annum of $27,435. Total expenses are $53,082, so there is a currently an annual loss of $25,647. The property would now be worth about $700,000+
I can service both loans, but generally can't afford to make additional repayments. I'd like to buy a home in Melbourne eventually, but am in no hurry.
QUESTION: Is my current situation working against me financially? Would I be better selling one or both of the Sydney properties and buying a Melbourne house, with a smaller mortgage, and paying that off? Or keep one Sydney property or both? I'm really confused what to do. Any advice will be gratefully received...especially as I don't possess a financial mind!
Mike L
