Put all eggs in one basket or diversify

Hi,

this is my first ever post on somersoft and I am hoping to get some thoughts on what you would do if you were in my shoes.

We have sold our family home and are renting while we look for a new property in the Kangaroo Ground area in Victoria. We are moving from a suburban family home to a 15 to 20 acre property to fulfil our dream of having a country lifestyle with horses etc. A decent property in Kangaroo Ground will cost us approx $1.2M to $1.4M, the area has a good reputation and we believe has good capital growth potential. We are struggling to find a decent property and are now contemplating other options.

One of the options is to buy a property 10-15 minutes further out from Kangaroo Ground, save $400-500K and invest that money on a beach house or other investment property.

We are torn as we love Kangaroo Ground, but aside from not finding the right property yet (we have only been looking for about 6 months) we keep seeing other properties just outside Kangaroo Ground for a lot less money.

So if you were in our shoes, would you hold out to get the perfect property in the perfect area (for your primary residence) or would you compromise on location, but save money and diversify by investing the savings elsewhere?

Look forward to your thoughts. And if anyone thinks we are crazy to be getting into horses, we know you are 100% right, but we are going to do it anyway as we just love them.

Cheers
 
Where are you hoping to be in 10 years time?
Buying a 1+mil ppor brings you close to that or further away?
 
Where are you hoping to be in 10 years time?
Buying a 1+mil ppor brings you close to that or further away?

In 10 years we are hoping to be living in our dream home and not feeling like we have compromised on location or anything else. We would also like to have some investment properties. I love the idea of getting into investment properties now but if we buy our dream home now, it would be quite a while before we could invest as we would be mortgaged close to 80% of the value of the property.
 
Depends on your income, age and wish.

It seems too risky to me if you need 80% of the $1.2m loan.

$1m loan takes at least $5k repayment at the current low interest environment for 30 years and you can't claim any tax on the interest as PPOR.

If I were you, I would diversify it. Buy a PPOR at $600k-$700k and look for some IPs. Then review the whole portfolio in 3 years time.

That's just me though. Good luck!
 
...the area has a good reputation and we believe has good capital growth potential. We are struggling to find a decent property and are now contemplating other options.

Maybe have a look at the south-east corridor?
eg Nar Nar Goon, Garfield. More transport infrastructure (freeways, railway) than K-Ground, St-Andrews etc

The Y-man
 
Hi,

this is my first ever post on somersoft and I am hoping to get some thoughts on what you would do if you were in my shoes.

We have sold our family home and are renting while we look for a new property in the Kangaroo Ground area in Victoria. We are moving from a suburban family home to a 15 to 20 acre property to fulfil our dream of having a country lifestyle with horses etc. A decent property in Kangaroo Ground will cost us approx $1.2M to $1.4M, the area has a good reputation and we believe has good capital growth potential. We are struggling to find a decent property and are now contemplating other options.

One of the options is to buy a property 10-15 minutes further out from Kangaroo Ground, save $400-500K and invest that money on a beach house or other investment property.

We are torn as we love Kangaroo Ground, but aside from not finding the right property yet (we have only been looking for about 6 months) we keep seeing other properties just outside Kangaroo Ground for a lot less money.

So if you were in our shoes, would you hold out to get the perfect property in the perfect area (for your primary residence) or would you compromise on location, but save money and diversify by investing the savings elsewhere?

Look forward to your thoughts. And if anyone thinks we are crazy to be getting into horses, we know you are 100% right, but we are going to do it anyway as we just love them.

Cheers

Financially it might not be the smartest decision but if you know it will make you happy (and you can comfortably afford the repayments) then that is all that really matters.

The other option would be to find a property to rent that offers the lifestyle you want (assuming you aren't renting something that meets your criteria already). This option would mean you can make sure the reality is everything you dreamed of and afford to purchase an investment but this type of rental property won't be easy to find.
 
The other option would be to find a property to rent that offers the lifestyle you want (assuming you aren't renting something that meets your criteria already). This option would mean you can make sure the reality is everything you dreamed of and afford to purchase an investment but this type of rental property won't be easy to find.

Rental properties of this type are rare but still come up but the rent will be $1200 to 1500 per week, so aside from the "try before you buy benefits" there aren't any cost savings. We are certain this is the lifestyle we want so would rather just start that next chapter in our lives just contemplating the pros and cons of location, location, location (Kangaroo Ground) compared to 15 mins out for $500K less (Cottles Bridge, Smiths Gully).
 
Maybe have a look at the south-east corridor?
eg Nar Nar Goon, Garfield. More transport infrastructure (freeways, railway) than K-Ground, St-Andrews etc

The Y-man

Just checked out Nar Nar Goon and Garfield on the map as I didn't even know they were in Victoria. I imagine they would be heaps cheaper but just too far out for us. I mainly work from home but sometimes commute into the city for meetings and want to be within a 1 hour commute to the city. Plus, we made the decision to move our kids to KG Primary School so don't want to move them again.
 
Depends on your income, age and wish.

It seems too risky to me if you need 80% of the $1.2m loan.

$1m loan takes at least $5k repayment at the current low interest environment for 30 years and you can't claim any tax on the interest as PPOR.

If I were you, I would diversify it. Buy a PPOR at $600k-$700k and look for some IPs. Then review the whole portfolio in 3 years time.

That's just me though. Good luck!

Our loan will be close to 80% of a $1.2M value property because 25% of the loan is a business loan that is secured against the house. The repayments are made by the business so it doesn't come out of our earnings but is still our risk.:confused::eek:

My head is saying diversify move 15 mins further out, still get the nice country lifestyle and buy an inner city or beach investment which will have better capital gains than the rural property. But my heart is saying buy your dream house in Kangaroo Ground and think about investing later....
 
From reading your posts I get the impression your more leaning towards buying your dream home and personally I think that is what you should do.

I think deep down that is what is going to make you happiest and at the end of the day, isn't that what life is all about?

Some peoples dreams are to own many IP's and some are to own a dream home. Your in a position now to make that decision so why not do it?
 
Hi asryan,

For wants and bang for buck,what's wrong with the dandenongs?

Eg:Olinda,emerald etc.

Tree change without the price tag,just a thought.

Also Woori n,coldstream,Three bridges etc.

Cheers Spades.

Good luck on your search.

Cheers Spades.
 
From reading your posts I get the impression your more leaning towards buying your dream home and personally I think that is what you should do.

I think deep down that is what is going to make you happiest and at the end of the day, isn't that what life is all about?

Some peoples dreams are to own many IP's and some are to own a dream home. Your in a position now to make that decision so why not do it?

I think you are right. My biggest problem is that I want my cake and I want to eat it - ie I want my dream home and I want investment properties, but I have to choose :(
 
Hi asryan,

For wants and bang for buck,what's wrong with the dandenongs?

Eg:Olinda,emerald etc.

Tree change without the price tag,just a thought.

Also Woori n,coldstream,Three bridges etc.

Cheers Spades.

Good luck on your search.

Cheers Spades.

Thank you for the suggestions which are all good, just don't want the kids to have to change schools hence the reason for focusing around Kangaroo Ground.
 
Here's the Success Puzzle exert I like to refer to when it comes to decision making:

Here are four questions I use and I would recommend you begin using whenever a major decision must be made:

1. DO I WANT TO be, do or have this?

2. Will being, doing or having this MOVE ME IN THE DIRECTION OF MY GOAL?

3. Is being, doing or having this IN HARMONY WITH GOD?S LAWS OR THE LAWS OF THE UNIVERSE?

4. Will being, doing or having this VIOLATE THE RIGHTS OF OTHERS?

If the answer to the first three questions is YES, and the answer to the last question is NO, make the decision and get moving.

I hope this helps.
 
The impersonal, thinking with the head thought - which is all of us except yourself - would immediately think option B....

Move a bit further out, spend a bit less, and put the difference into other income properties.

A dream home can quickly become not that if you are saddled with too much week at the end of the money...better to keep it a bit conservative from the cashflow aspect.
 
The impersonal, thinking with the head thought - which is all of us except yourself - would immediately think option B....

Move a bit further out, spend a bit less, and put the difference into other income properties.

A dream home can quickly become not that if you are saddled with too much week at the end of the money...better to keep it a bit conservative from the cashflow aspect.

Although the truth hurts, I think you are right. Also with extending ourselves for the dream home there is a risk we wont be actually able to enjoy life as we will be financially stretched and horses come with very expensive vet bills which will add to the stress:(
 
Guess it really depends on how confident you are with an area.

i am in favor of diversification as i can avoid land tax, and i often second thought most of my decisions anyway so in my case its good to spread it round :D
 
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