Opinions required (which way forward?)

Howdy folks.

Needing some opinions and perhaps a fresh perspective on our current situation.

PPOR Value $500K
Loan $354K IO variable.

IP Value $350K
Loan $198K IO variable.

Overall LVR 64.9%

As you can see from a LVR standpoint we’re pretty much ok. The real issue we have is cashflow. I make about $50k pa and my wife about $43k pa and we’ve got one little one and another on the way.

We’ve only been investing a short time but have got to where we are via a couple of subdivisions; one rural and another in metro Adelaide.

Very torn at the moment because after much reading and research buy and hold definitely seems the proven path but the subdivisions were both very profitable ventures and we have a fairly good idea now of what works and what doesn’t.

I guess at this point I was hoping for your learned opinions on which is the best way forward.

Hold onto the IP and wait it out until we can service another purchase?
Sell down IP to pay out PPOR debt and fund another subdivision venture?
Other?

Your opinions would be greatly appreciated.

Thanks :)
 
Hi Tarah.

We would if we could but pretty sure we wouldn't be able to service or qualify for the loan. Therein lies the prob...

How have others continued to buy when running into servicability issues (especially on relatively lowish incomes)?

Thanks :)
 
Cheers Richard.
Perhaps I'll have to go back to my mortgage broker find out exactly what the options are. Was really only going off the results of some online calculators :rolleyes:

Thanks again :)
 
Very torn at the moment because after much reading and research buy and hold definitely seems the proven path but the subdivisions were both very profitable ventures and we have a fairly good idea now of what works and what doesn’t.

1. I would err towards staying with what you know best - you have paid the time/price in learning the skills.

2. If you're pretty sure you can't service a loan, don't get it - it comes into the zone of stretching things a bit too thin - and it can and does break.

Cheers,

The Y-man
 
Hi, your PPOR has been taken into the LVR equation. I always think that PPOR should not be classified as 'investment'.

Is it possible in your case to find a property that can be used for dual purposes? Eg a big house which can be divided for PPOR + half rental as in granny flat. I actually wanted to do that with my old cottage in Clapham but it got too much for me & I sold out for the cap gain.

I saw a tired Californian bungalow in Black Forest [about 450K] which was already tenanted as 2 flats. Not bad location too, walking distance to Cross Rd Woolies etc

Your PPOR loan may be the stumbling block to your investment progress. But your]'re the best person to judge what's right for you.

Good luck going forward,

KY
 
Top