Needing your opinion on whether I should Buy Now or Later.
Hello All
Needing your opinion on whether I should Buy Now or Later.
Background
Mrs 147 and I love our PPOR but a change in our circumstances will make it too small. We have two bed, minor yard, fully reno, no parking terrace. No debt, we own the lot.
Would like 3 bed + office for my business with separate access, car parking for one, yard and room for a bath (We only have shower).
These are rare in Inner City unless you have $1M+ to burn.
What We Found by Chance
Knowing the market is going south I am not looking but, unplanned, we inspected a terrace in Redfern (the good bit) with front and rear access, able to accommodate car park, plus yard. 5.0m wide x 30m deep in a leafy street. (that is very big here). Excellent location accepting your neighbours are brothels.
IMO Structurally very good. A little drummy but been painted, keep simple and looked after. Good bones, no cracks, floor solid, (I jumped up and down a bit) etc… Timber looks well cared for.
5.0m wide (that is big here). Being used as offices (mixed use zoning) so entry hall with living, dining with small kitchenette off the dining. Two beds above 5 x 3.8 and 3.1 x 4.0m each with 5 m wide balcony. Very small bathroom on ground. Rent for $400 week due to bathrooms. Solid brick staircase to rear yard.
Bonus is self contained lower ground flat accessed from rear and or internal staircase. Two rooms with laundry and small but workable kitchen, some damp but a decent fan system would fix that. Rent for $250 week. Sliding door to rear yard.
Rear yard has 5 x 8 m deck with access via door to lane. Mature palms and trees but palms would go to provide carpark. Still leave you with 9m yard.
Now, for those not use to inner city living this may seem small but it is actually huge. Asking $800ish k. In summary a property with great potential as investment and/or future PPOR with IP below. Will allow growth as PPOR or if we move out can always be a very much dual IP investment in the high end.
My Dilemma
If this was the bottom of the market I would be all over it. But IMO with a least one more rate rise to come my IP brain says pass but my PPOR heart and brain says these are rare and it has the right bones, layout, and location. So there is opportunity lost if I pass.
What We Would do if We Bought
By now and rent it out while we rework upstairs. Assume purchase outlay $875and rent is $650 week net we need be NG $570 week so after tax $295 a week plus $1k land tax every year. This is ok we can do that. Also assume works is say $100k but we find from cashflow being in the building game.
Essentially we are buying for a future PPOR in 2 to 5 years time. We would move in to top terrace and rent out the flat and sell our present PPOR to family trust. In this scenarios we are NG say $133 or net $70 a week with no land tax as prop would be PPOR.
But to move would mean PPOR goes to FT and cost say $220 week to hold. We could off course sell clear the PPOR and not hold another property but it is in excellent condition and location. I guess that decision would be based on our Cashflow.
In summary, assume I sell, PPOR & Flat it will cost $70 a week assuming rents don’t go up which they may.
Pros
The area is very good and only getting better. Always be prime RE especially with the parking which is the limiting factor to growth of the high end PPOR market here. Options to rent out or keep as PPOR.
Lower floor unit a nice earner and future parent’s accommodation when they get old and frail, or massive office for my business I decide to grow it more. Hence opportunities for business to subsidise rent etc….
Rents should go up helping the equation.
We are getting the dream PPOR with room downstairs to expand into when the rent does not offset the amenity of using it anymore. Will only go up in the long term being Inner City.
Cons
IMO end 2005 will be the bottom with flat for two years and then a rise. This makes no sense investment wise to NG with market going south or flat!
What if market really crashes?? What if it hard to rent? What if we change and move out of Sydney?? What if we hit a recession?
Should I simply sit on my hands and wait for the next bargain in one to two years time?
What do you think???
I note this is decision of heart over head so go for it. I post with flame proof suit on. I encourage vigorous debate.
Regards, Peter 147
Hello All
Needing your opinion on whether I should Buy Now or Later.
Background
Mrs 147 and I love our PPOR but a change in our circumstances will make it too small. We have two bed, minor yard, fully reno, no parking terrace. No debt, we own the lot.
Would like 3 bed + office for my business with separate access, car parking for one, yard and room for a bath (We only have shower).
These are rare in Inner City unless you have $1M+ to burn.
What We Found by Chance
Knowing the market is going south I am not looking but, unplanned, we inspected a terrace in Redfern (the good bit) with front and rear access, able to accommodate car park, plus yard. 5.0m wide x 30m deep in a leafy street. (that is very big here). Excellent location accepting your neighbours are brothels.
IMO Structurally very good. A little drummy but been painted, keep simple and looked after. Good bones, no cracks, floor solid, (I jumped up and down a bit) etc… Timber looks well cared for.
5.0m wide (that is big here). Being used as offices (mixed use zoning) so entry hall with living, dining with small kitchenette off the dining. Two beds above 5 x 3.8 and 3.1 x 4.0m each with 5 m wide balcony. Very small bathroom on ground. Rent for $400 week due to bathrooms. Solid brick staircase to rear yard.
Bonus is self contained lower ground flat accessed from rear and or internal staircase. Two rooms with laundry and small but workable kitchen, some damp but a decent fan system would fix that. Rent for $250 week. Sliding door to rear yard.
Rear yard has 5 x 8 m deck with access via door to lane. Mature palms and trees but palms would go to provide carpark. Still leave you with 9m yard.
Now, for those not use to inner city living this may seem small but it is actually huge. Asking $800ish k. In summary a property with great potential as investment and/or future PPOR with IP below. Will allow growth as PPOR or if we move out can always be a very much dual IP investment in the high end.
My Dilemma
If this was the bottom of the market I would be all over it. But IMO with a least one more rate rise to come my IP brain says pass but my PPOR heart and brain says these are rare and it has the right bones, layout, and location. So there is opportunity lost if I pass.
What We Would do if We Bought
By now and rent it out while we rework upstairs. Assume purchase outlay $875and rent is $650 week net we need be NG $570 week so after tax $295 a week plus $1k land tax every year. This is ok we can do that. Also assume works is say $100k but we find from cashflow being in the building game.
Essentially we are buying for a future PPOR in 2 to 5 years time. We would move in to top terrace and rent out the flat and sell our present PPOR to family trust. In this scenarios we are NG say $133 or net $70 a week with no land tax as prop would be PPOR.
But to move would mean PPOR goes to FT and cost say $220 week to hold. We could off course sell clear the PPOR and not hold another property but it is in excellent condition and location. I guess that decision would be based on our Cashflow.
In summary, assume I sell, PPOR & Flat it will cost $70 a week assuming rents don’t go up which they may.
Pros
The area is very good and only getting better. Always be prime RE especially with the parking which is the limiting factor to growth of the high end PPOR market here. Options to rent out or keep as PPOR.
Lower floor unit a nice earner and future parent’s accommodation when they get old and frail, or massive office for my business I decide to grow it more. Hence opportunities for business to subsidise rent etc….
Rents should go up helping the equation.
We are getting the dream PPOR with room downstairs to expand into when the rent does not offset the amenity of using it anymore. Will only go up in the long term being Inner City.
Cons
IMO end 2005 will be the bottom with flat for two years and then a rise. This makes no sense investment wise to NG with market going south or flat!
What if market really crashes?? What if it hard to rent? What if we change and move out of Sydney?? What if we hit a recession?
Should I simply sit on my hands and wait for the next bargain in one to two years time?
What do you think???
I note this is decision of heart over head so go for it. I post with flame proof suit on. I encourage vigorous debate.
Regards, Peter 147
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