Property investing vs starting a family

[Jayro]

Ok let me explain a little. My wife and I have been married for 5 yrs now and one of us are VERY keen to start a family (wife) the other one is looking forward to it I think, lol No seriously I am but just a little nervous I guess. My thing is I really wanted 3 property's by the time I was 30 and my wife wants a child by the time she is 30. My wife is more than happy to get another IP when ever the time is right. I on the other hand am not sure if im being carefull, or just using every excuss available to not get another property just as the plundge is holding me back a little.

I guess my only concern is missing her $50k a yr for a yr or so that she is off work. We basically have about $30k that we have saved as back up if it is needed when the time comes so thats a little peice of mind. The next IP will set us back around $50-$100/wk (before tax break). excluding this my wage will virtually cover things if the time came and she was off work. Then there is the $30k if needed.

I just think if I wait till a child is born (who knows how long it could all take to fall etc) then by the time she returns to work etc we could have missed out on possible price increases. Anyhow just wondering what the mums and dads out there think about it? Its not anything we are arguing over or anything. We are both very easy going people and believe as long as we plan as we have done and work hard that we will be ok in the end are currently very comfortable. Its just the unknown I guess. And I guess sightly concerned that an electian win by a certain party could see rates jump ( and no im not wanting to get into the lib vs lab debate, lol). As it stands now we can handle any rate rises but im just not sure what would be if rates were to jump and we were to have 3 props and one income. Then on the other hand am I just thinking of new ways (excuses) for me to not get that 3rd IP simply because its a little daunting. Ah bugger, I thought it was hard being 10 yrs old and desiding what ice cream I wanted from the canteen, lol

Thanks for any input,

Jayro!

 

[Dazz]

I just think if I wait till a child is born (who knows how long it could all take to fall etc)

With humans it's about 9 months.

...but seriously...on one hand you are talking about something that will be massively important to you both, and the other is simply buying houses. No contest really.

P.S. From an investor who'd give the lot away tomorrow if it ever came to IPs vs the kids.

 

[Tizzy]

Agreed. This is one decision that doesn't fit easily on a spreadsheet. Basically there is no sensible financial reason to have kids at all!! But hey, they give you so much other stuff that you can't get any other way.

I personally think this is one your wife has to win. You can shift your goalpost, she can't really, not safely.

 

[marg4000]

Hi Jayro

These are questions only you and your wife can answer.

But some points (in no particular order).

Sounds as if you both need to work out what you want over the next 10 years.

Female fertility declines from 25 years onwards, not sure of exact figures but present thinking seems to indicate that if you want children then 30 is considered to be about time to start "trying". You may be lucky (or unlucky?) to get pregnant immediately, but then again you may not. Sounds as if your wife is starting to hear her biological clock start ticking.

There seems to be a general feeling that unless you start early with IPs then you are "missing out". We dabbled with IPs in our thirties but back in the 1980s we didn't know what we were doing. Bought and sold, very little capital growth. At the age of 40 we bought our first "buy and hold" IP, and another 2 years later. Family and other concerns, and life in general happened.

Bought another IP in 2004 in a beachside location where we intend to retire. The first IPs were cash flow positive after the first couple of years and paid themselves off. We have just sold them as we wind down to retirement.

Point is, it is never too late to start.

And prices will always go up. You may well be having this same debate with yourself in 3-4 years time - do we have a child now or wait another couple of years so we can buy another IP?

And project ahead, with kids these days going to university or other further study or apprenticeships, you will have financial obligations for the best part of 20 years or more, and that is just for the first child. We have friends going into retirement with kids still being educated, which is a bit scary.

Have a child at 30 and you can plan on them being relatively financially self supporting (apart from accommodation) by the time you are 50. Have a child at 40 and you are looking at still (at least partly) supporting them when you are 60.

Just some random thoughts - it's an important decision that only you can make.

Good luck
Marg

 

[Jayro]

Thanks for your coments. Appreciate them. And i ment "who knows how long it will take to fall" Not how long till the baby falls out, lol.

Ok so basically the boss is on the right track. And so is my accountant it seems. Keep smashing our PPOR, have a kid, be in good shape in about two yrs "if" all went to plan and then keep moving forwards. Sounds good to me. Ok now im off to my nephews (also my godsons) 1st birthday party. I got him this great little motorised car for me to push him around on till he is older. Just hope he likes the thing now.

Thanks again all

cheers Jayro!

 

[yieldmatters]

Go for the kid! Kids are great AND it looks like this kid will definetly have the advantage of a nice backyard!

 

[wylie]

I am with the others on this. Reading your post it sounds like you have a PPOR and on IP now. That is a pretty good start for someone not yet 30.

I have a friend who didn't have a child until 40 because they were busy travelling and doing things. I had my first at 28, next at 32 and then 36. Would have like them closer but mother nature took care of that.

I always had an idea I would like an IP for each child by the time they get to high school. My thinking was that their school fees could be met by the IP. This was not a "must have" but a very loose idea and something to aim for.

We found kids don't cost a lot (unless you really lash out on expensive "stuff") until they hit late primary or high school.

However, you need to allow for the scenario that your wife may want to take more time off than one year, but you have saved a good buffer already.

Good luck, you are heading in the right direction.

Wylie

 

[WillG]

No reason you cannot have it all. Kids and IP's are both very important.

Keep on looking at IP's but 'tighten' your criteria to manage risks. If a good deal comes along and 'all the ducks line up' ...

Good luck

 

[jingo]

My thing is I really wanted 3 property's by the time I was 30 and my wife wants a child by the time she is 30. My wife is more than happy to get another IP when ever the time is right. I on the other hand am not sure if im being carefull, or just using every excuss available to not get another property just as the plundge is holding me back a little.

Hi Jayro,

I think you've done very well to have your PPOR and 2 IP's already! I also think you are sensible in waiting until after your child is born to buy another IP.

You don't want to have to worry about increased debt, etc when you are new parents. Believe me, you will have enough to worry about!! (My daughter is 3 and the first year of her life I walked around in a daze from lack of sleep!).

Although you may 'miss out' on some growth from a third IP, if you wait a while you will have greater cash flow from your existing IP's, and will be able to service a 3rd Ip fairly easily. (Depends where you buy, but in theory, this should work!).

All the best, and enjoy your journey into parenthood!

Regards Jason.

 

[sue78]

P.S. From an investor who'd give the lot away tomorrow if it ever came to IPs vs the kids.

Same here!

It took us 4 yrs to conceive our lil boy which was eventually successful via a few rounds of IVF.

Plus your wife doesn't have to be a stay at home mum...she can go back to work after maternity leave part time.

Single mums with 3 kids can survive I'm sure you guys will be fine!

 

[duncan_m]

Female fertility declines from 25 years onwards

And not only that.. the risk of birth defects climbs dramatically the older a woman (and to a lesser extent, the father) is..

I say knock her up sooner rather than later.. My dad was 47 when I was born, sucked having an older Dad at times.. I had my first at 31.. In hindsight, 25 would have been perfect.

 

[beachgurl]

We are looking at planning for a baby next year. We bought a few IPs recently and while we have more serviceability now, we don't want to be in a position where I have to go back to work if I don't want or can't deal with the work/baby balance (is there such a thing?). So we decided to work out our serviceability on hubby's wage. Then if I do go back to work part-time, the money I would earn would be a bonus to pay down our PPOR.

One thing we have done to help us with baby time is to buy 2 properties in the one street which were both purchased under market price. Once I am in the family way, we intend to renovate and sell one of them. This should make us around 50K and dipping this into the other IP and stretching the loan back out to 30yrs, we will have (at the very least) a CF neutral IP which will pretty much take care of itself.

We are having difficulty in not buying any more properties right now but we have to keep thinking that we will not have both salaries forever. If you are fortunate enough to find a property that won't cost a lot to hold per week, perhaps buy that. Otherwise I would be pleased with your current properties and get working on the baby making!

 

[alexlee]

I'm 30, and we're planning on having kids in the next year or two. At 25, I wouldn't have made a very good father. I wasn't ready, and if my fiance had been pregnant when I was 25, I would have freaked out. Now, if my fiance told me she was pregnant, I would be elated.

People mature at different speeds. While fertility does decrease from 25 onwards, 30 year old parents are certainly not rare these days.
Alex

 

[letiha]

Well as a mum of 3 kids..and a single one aswell...thanks Sue

I would say there is always balance, i say go with both, just find an IP that is appropriate for your needs and cash flow.

 

[tiger]

I'm 30, and we're planning on having kids in the next year or two. At 25, I wouldn't have made a very good father. I wasn't ready, and if my fiance had been pregnant when I was 25, I would have freaked out. Now, if my fiance told me she was pregnant, I would be elated.

People mature at different speeds. While fertility does decrease from 25 onwards, 30 year old parents are certainly not rare these days.
Alex

My aunt and uncle just had their first and they're around 40!

 

[Jayro]

Thanks again for your positive coments. "knock her up" hey Duncan, hahahaha, ah yes, I love it My wife reads that, shakes her head and smiles "guys" lol

Our current situation is the one IP in quakers hill NSW on the new side, and then our PPOR here on lake macquarie NSW. Im 28 and wife is 27. Like you Alex, if my wife mentioned kids when I was 25 i would have fallen over. However if she said to me now "hun im pregnant" Id be popping the bottles and celebrating. I have seriously been stressing so much lately just feeling like im going to miss out if I didnt get that next IP in time, but i wasnt going to rush and just buy anything.

After reading all the responses I think im pritty happy with the idea of continuing to pay off our PPOR as we are (Min payments are $410/wk we pay $700/wk) and seeing how things go, if things take a little while and the right house is for sale then we'll see. I do want the next IP but I dont want to be tight when a kid comes along, I think I want to just be able to enjoy that time. Bit nervous about both actually, being a dad and getting another IP, lol

Thanks again everyone
Cheers Jayro

PS my nephew loved the motorised car. The noise of it scared him at 1st but he was sitting on it and smiling by the end of the day.

 

[Rainshadow]

No worries, you can do both.
We bought our first investment property when our first child was about 6 months old - we weren't as organised as you two! - and now we have six children and more properties than children. We chose older run down properties mainly (fixing up houses is family time I guess) and we tend to not have expensive overseas holidays or flash cars (sigh). One day we might seem rich but now we just feel blessed!
I'd choose the children over the properties any day, so would my lovely husband, but we have both enjoyed the journey.

 

[devo76]

Wow . Good to see that other people art going through the child thingy like me. Im 30 now but when i was 28 i started to struggle with the whole ageing thing. I started to try to measure where i was in life and where i should be.
I am now happily married,I have climbed the ladder at work and have a great career. PPOR 3/4 paid off, IP purchased and now the big one ????? KIDS ?????. The wife and i are very happy at were we are now. Could have been further ahead financially but we made a decision years back to enjoy life as we go. I think we will have kids in about two years. Around that time we will either have our PPOR paid of or have purchased another IP.
I guess when you take a step back its a good problem to have. Lots of people in the world a lot worse off.

 

[sue78]

No worries, you can do both.
We bought our first investment property when our first child was about 6 months old - we weren't as organised as you two! - and now we have six children and more properties than children.

6 kids! wow that's great

Lizzie....you you're amazing with 3 kids and studying and investing.

I would love to have more kids but also have my days where I can't even handle one child!

 

[alexlee]

Around that time we will either have our PPOR paid of or have purchased another IP.

Are you distinguishing between non-deductible and deductible debt here, or simply focusing on 'I don't want debt against my PPOR'?
Alex