Not going to plan

[Jayro]

Well things were ticking along great. We have a new little 5wk old bubs, we have our PPOR and 2 IP's now. I thought I had been doing the right thing by the family by getting some property behind us but these days I feel like iv let them down.

My wife and I have been in our PPOR for 3 yrs now and do not particularly like living here. Its noisy, a little rough and just not us. SO we looked at our options and figured well its more important to be happy in our PPOR than have IP's, as we can get them later if we wish.

HOWEVER, due to the current market and us having not had our property that long plus the 2 IP's being on fixed loans things dont look too rosy at all. It can be done and we could move into a house we would like but it will be costing us considerable money to do it.

I just feel like I got us into property and now I feel a bit bloody stuck in it. May be best to wait it out a yr until wife returns to work again for a few days a week and see how we are looking then. We are just a little worried that property prices go down like those in the states and then we are really stuck. BUT no crystal ball so really no idea how things will pan out.

Its not super bad here but little things annouy me like loud radios, noisy cars up and down the street, and generally alittle rough. No break in etc but just..... you know.

Anyhow thats my rant. Im not going super depressed or anything (oka little, lol) but just thought id throw it out there and see if others have been in a similar spot at all and what the out comes were.

Cheers Jas!

 

[boomtown]

Turn your PPOR into an IP and go rent somewhere nicer. You may even come out ahead financially.

 

[angela]

it's a bad feeling being stuck living somewhere you're not happy
Are you able to rent your house out and rent somewhere nicer yourself?

 

[angela]

snap boomtown

 

[craigb]

some days can be great and others not so, we all feel like this some times, your not allone , the flip side , if you sell the IP's in a few years lets sey 5 or so! you might wish you toughed it out, good luck any way you go,
ps the lack of sleep etc doesent help these decisions either.

 

[dallee]

In very similar situation, but sharemarket to blame, rather than IPs. Even in a 'good' neighbourhood you can get bad neighbours. We have one on one side that lights bonfires on our boundary and keeps pig-hunting dogs; and another that leaves crazy notes on our driveway. You just have to grit your teeth and promise yourself that you'll escape one day - renting sounds like a good suggestion.

 

[marg4000]

Jayro, congratulations on the new little one.

With a 5 week old bub I KNOW you and your wife will be sleep deprived and therefore things may be looking a little more gloomy than they really are.

As Boomtown said, rent elsewhere. Otherwise, even if prices totally tank (which I don't predict) then so long as you are buying and selling into the same market then the price difference should be similar if you wish to sell your PPOR and buy another at a later date.
Marg

 

[asdf]

First year is tough with the new bub. Just have to be confident that IPs will eventually come good. It is a long term investment. Then again, no guarantees that things won't just stay shi* for the next 10 years. Moving out and renting somewhere else makes a lot of sense. Still get to keep your place as your PPOR for tax purposes. Whereabouts in NSW are you?

 

[The Y-man]

...we could move into a house we would like but it will be costing us considerable money to do it.

Hi Jas,

Just wondering - you seem to indicate that the IP's are somehow contributing to this - but in reality, woud it have been any different if you didn't have the IP's? Surely the cost of moving (selling up or whatever) wold be the same regardless..... unless you bought the ppor you did because of financial consideration for your ip's....

Cheers,

The Y-man

 

[Propertunity]

Well things were ticking along great. We have a new little 5wk old bubs, we have our PPOR and 2 IP's now. I thought I had been doing the right thing by the family by getting some property behind us but these days I feel like iv let them down.

Well the alternative was doing nothing for their future like 80% of the population out there. You are to be congratulated on your efforts. They might work out - or they might not - but a least you had a go! And if it all goes bad (unlikely) you have a learning for getting up and doing it better next time.

My wife and I have been in our PPOR for 3 yrs now and do not particularly like living here. Its noisy, a little rough and just not us.

OK - so what are your options now that your tastes have gotten better?
Sell CGT free and buy another PPOR? or
Turn it into an IP and buy another PPOR? or
Turn it into an IP and rent somewhere nice yourselves?
Leave it for a year, bubs won't even be playing in your back-yard by then, so will not even know he lives in a dodgy area.

SO we looked at our options and figured well its more important to be happy in our PPOR than have IP's, as we can get them later if we wish.

pffffffft! That's just the sleep depravation talking and possibly even a bit of post natal depression creeping in. Seriously keep a watch on it (and especially the Mrs) and get help if you need to. Men can pick up on the feelings of their wives - I remember during one of our 5 pregnancies where I got all the food cravings and hit the fridge for gherkins and caramello chocolate at 2am Unfortunately the cravings never stopped even after the birth - and that's how I got fat.

I just feel like I got us into property and now I feel a bit bloody stuck in it.

You're supposed to feel stuck in it - that's why it works so well as an investment - no silly emotional trading - just long term buy & holds. Calm down diddly.

May be best to wait it out a yr until wife returns to work again for a few days a week and see how we are looking then.

The first sensible thing you've come up with

We are just a little worried that property prices go down like those in the states and then we are really stuck.

Seriously, stop filling your head with crap off the USA news, ACA, etc etc.

Its not super bad here but little things annouy me like loud radios, noisy cars up and down the street, and generally alittle rough. No break in etc but just..... you know.

That stuff happens everywhere. No break-ins = good.

Cheer up Jas! Anyone can feel great when things are good: your IPs are fully tenanted, they all pay their rent in advance, they don't call with maintenance issues, the REA does not go broke and take your rent with them, the PM does not put prostitutes and bikers in your IP, the valuer revalues with a much higher-than-you-expected figure, banks are falling all over you to lend you their money at a really cheap rate, rents are going up weekly....well you get the idea. But what are you going to do when things get tuff? Fold and sell your IPs to buy a nice comfortable PPOR? pfffffffffft! This is when men & women of character shine. Dig out your list of written down goals and strategies and encourage yourself! OK rant over.

 

[Jayro]

Thanks for the replies.

And thanks Marg, little bubs is a real qt.

G'day Y-Man,

You are right, we would still be loosing money by selling and moving regardless of the IP's. And look, the IP's are no hassles for us and we love them BUT life is short and I wont be stuck in a crappy house or suburb waiting for the days things work out for me so I can then buy us a nice house at 55yrs old (no offence to those that are 55 but you see my point I hope)

When I said it will cost us money that was refering to our current PPOR which has not gone up at all in 3 yrs (maybe down $10K) and we have spent $20k on reno here as well. However that aside, we need to be happy and comfortable, thats important to us.

I got off the phone to my CBA manager at 8.30pm (was impressed to see he stayed back to work the figures out for me ) and he indicated things can be sorted. We have one IP with another lender which we are planning to keep. This seems achievable. Then our reason for selling the Sydney IP is that we need the $100k profit from it for us to be able to move into the new PPOR. With only being on one wage now this seems the way we will go. No CGT to be paid on the $100k as it was generated before it became an IP as it was our PPOR in sydney.

And im sure being a bit of a worrier at times or whatever and a little less sleep these days makes me a little irrational (as has been brought up here, lol) but at the end of the day we would both really like to be in a nicer home, do not want to rent and due to the crappy market can get into where we want at a reasonable price.

I know all wont agree with my thoughts (probably none will) but im over the swearing, the party's and the other bullsh#t that goes on. I know you cant escape it (although id love acres lol) but I am hopefull we can reduce it.

asdf we are living on lake macquarie and our IP's are one in quakers hill NSW and one in Burnie Tasmania.

Renting is not an option.

Any of that make sence??? Maybe not but thats what we came up with.

Cheers Jas!

Appreciate the replies.

 

[Y33]

JAYRO,

Is this your first bub. If so the emotions may be running a little high at the moment whilst it all sinks in. Mine are still high 11 months later.

You only lose money if property values go down and you SELL.

If you can keep things on an even keel until the other half goes back to work that will probably relieve a fair bit of stress. Can be hard living in a place your not too fond of but if it is only for a short time whilst you are trying to get ahead then hang in there. Otherwise consider renting a small quiet place that cost less to rent than you will get from renting out your PPOR.

Do you really think it will be easier to pick up another 1 or 2 IP's later? If it is then you can have 3 or 4 and your PPOR instead of just 1 or 2.

Property investing is mainly about the long haul and you are already well under way. If you are really struggling to hold it all together then bounce some figures with some of the members here and see what can be worked out.

If you need a chat then just pm me and I will send contact details.

 

[Minxdamanx]

Jas

You are getting some great advice here.

My only addition would be to not make a decision either way for a month or so - wait for the sleeping to get back to 'normal' and the whole 'protective instinct' thing to settle a little. That sounds a bit patronising now I read it, and really that isn't how I mean it.

Decisions made under such times are unlikely to be the best or most logical ones.

Good luck to you, your wife and new baby. This is a precious time for you all.

 

[Aaron Sice]

put your blinkers on an focus on what happens inside your proerty boundary, not outside.

edge your lawns, mow them regularly, take up gardening and instill some pride in yourself about your decisions. paint the house a bit different, change the outside lights, pop in some funky new pot plants....either way dude you gotta stay positive about where you live.

when you look outside in the morning all you'll want to focus on, is if the lawn needs another mow, or hitting the dry spot in the middle with some wetting agent, or why on earth you let your wife talk you into those stupid yukkas in the corner there - not focusing on the fresh set of number 11s running right down the street.

you'd be surprised what a change of mindset can accomplish. i'm an arrogant little pr1ck and i amaze myself sometimes.

 

[craigb]

so wonderfull to see such a fantastic supporting and understanding group of post replies all champions for sure.

 

[Perp]

Jas, if you have $100K extra equity in your former-PPOR-now-IP, why not refinance to release $80K of it, rather than selling? Pulling out $80K in equity from that property as a 20% deposit on the increased amount you want to spend on a PPOR means that you can theoretically buy a PPOR for $400K more (if you can afford payments), which I'm assuming would be ample. As you rightly say, now is not an ideal time to be selling - but a great time to buy a better PPOR.

If your current lender is saying that they won't extend your finance sufficiently to keep all IPs, but that's what you want to do, then shop around. It's sometimes staggering how differently the various lenders view your situation.

If you want me to run some figures, PM me with value and loan amounts of each property, and I'll show you exactly what I mean.

 

[evand]

I have found some people are affected by the area they live in and some arent. I have been through a similar thing and my wife wasnt fazed at all where i wanted out of there.

You (and maybe your wife) sound like one who is affected. Life's too short mate to live somewhere you don't like and i know that part of the Central Coast/ Newcastle can be rough.

You sound young and its only a house or two. You can always buy later. Your first priority to your family is to be happy and whats the use of holding a couple of IP's if you're not happy. I don't get that part.

Property investing shouldn't be a trial that sorts the men from the boys.. It should make your life better, not a 'grin and bear it' existence.

So i say, do whatever you have to do for you and your family to be happy.....nothing can replace that.

Also, i've been through the sleep deprivation/emotional stuff and that has nothing to do with it. That's life with babies...gotta deal with that in any circumstances...good or bad.

But its much easier if you and your family are happy in live in an area you love, rather than just exist in.

 

[boomtown]

You say that renting is not an option.

With respect, I suggest you take a very hard look at that. The imposition of quarterly inspections by a PM (especially when they know you are an investor and are trying to impress you so they can win your business) is really nothing in the scheme of things when it puts significant money in your pocket every fortnight for no added effort by you.

 

[Invest]

I also feel down sometimes and I have just bought my first PPOR (no IPs yet) mid 2008.

I feel that the PPOR that I bought last year was a really bad buy... I stupidly fixed the rates and have 2.5 years to go with it. I am also not happy with the builing itself, the upstairs area needs a fair bit of work...

Then I guess it can all be fixed...

The main thing is to concentrate on beign positive and thankful.

Would you feel better if you had no PPOR, no IPs and were living in a sharehouse? lol

 

[keithj]

Renting is not an option.

Why not ?

For some here, renting a nice PPOR while investing in IP is the key to their strategy.

As others have suggested - rent your PPOR out, find a nicer place to rent yourself. Cashflow would be improved, you'd be happier, and there'd be no stuffing around with selling in a poor market, txn fees and your wealth plans would be accelerated slightly. Sounds like it would solve all your problems.

Maybe try renting for a year. If it doesn't work for you, then kick the tenants out of your PPOR & move back in yourself.