Unit close to city or House out west?

[mrfish]

Hi, some advice needed:

A friend of mine hunting for her first property facing a dilemma:

She’s a working professional making good wages and increasing. But at present, can only take out a loan of around 400K max for PPOR purpose.
She has been thinking getting a 1 bedder on the lower north shore as she’s fed up with travel so far from parents home & want to live closer to the city, IF renting out can get around 3.8% return. But in my opinion, since the property WILL be converted to an IP after the FHOG, she should forget about where she WANT to live rather than what gets the max return at the end of day.
In my mind, I’d always get something with a bit of land -- ie a house out west (e.g a Rouse Hill 4 bed HOUSE for just over 400K!!). Don’t know about the potential rental return, but if her wages stake up to the loan repayment, over time, the house with land will always appreciate more than a 1 bedder unit.

But me, being quite a novice, Would like to hear what other people think!

Cheers

 

[alexlee]

Why buy it as a PPOR at all? (If she's thinking about the FHOG, that can be saved for a future PPOR purchase).

Why not continue to rent (3.8% is a very low yield), and and buy IPs wherever?
Alex

 

[ermen]

Why buy it as a PPOR at all? (If she's thinking about the FHOG, that can be saved for a future PPOR purchase).

Why not continue to rent (3.8% is a very low yield), and and buy IPs wherever?
Alex

Definately get the first as a PPOR in Sydney. Second property and above doesn't get stamp duty exemption - only FHOG which is a pittance compared to the former.

 

[Peter Parker]

Definately get the first as a PPOR in Sydney. Second property and above doesn't get stamp duty exemption - only FHOG which is a pittance compared to the former.

Do the NSW rules allow one to buy IPs interstate without jeopardising the stamp duty exemption for the PPOR in Sydney?

Assuming the rent improves serviceability so that borrowing capacity exceeds $400k, it may be possible to afford an IP plus a PPOR within 12 months.

 

[ermen]

Do the NSW rules allow one to buy IPs interstate without jeopardising the stamp duty exemption for the PPOR in Sydney?

Assuming the rent improves serviceability so that borrowing capacity exceeds $400k, it may be possible to afford an IP plus a PPOR within 12 months.

No - you can't own any property in Oz. This rule almost caught me over, causing me a lot of inconvenience. My fault as I should've done my homework instead of assuming things I read on the forum are correct...