Upgraging my PPOR or by an IP, which should come first.

[Xjas]

Hi Jason,

It may be best to sit down with a broker from the forum who can explore your options with you. They can even come up with a finance plan involving your intention to build a property portfolio.

Without knowing your income, and family financials its difficult for people to know what is achievable in your own situation. My guess is that as you are able to pay around $44,000 off your home loan each year and support your wife and two children, you must be earning a decent salary.

If I was in your position, I'd probably take one step at a time. If you decide to upgrade your home, I'd sell the existing house first. Then I'd buy the new one and then explore your investment options.

Regards Jason

I intend to seek proper advice from a broker (and an accountant) but I am trying to get my head around the basics first so I can have a decent understanding of what a broker is telling me. The more I learn before I seek professional advise the less likely I am to put the investing thing into the too hard basket.

I would sell my current house first but it could take 3 years to find a new one, the area we want to live in doesnt have many houses on the market at any one time in the price range we are after so finding something we like might take a while, the main reason for changing is to get my kids into a good public primary shool so I have 4 years to find a house since its 4 years until my oldest starts school. Thats why in my initial post I was asking if buying an IP now might limit my ability to upgarde my my PPOR later since it might take a while to find a new PPOR.

 

[Aaron_C]

The more I learn more confused I get I think.

Quick question for the finance guys, hypothetically...

If I buy a $700000 PPOR, with the intent of buying an IP or IPs in the future I would be best getting a IO loan with a LOC yes?
I redraw $170000 from my current PPOR for the 20% deposit on the new PPOR plus the associated expenses.
I sell my current PPOR for $400000, pay off the loan on that property and am left with $130000 which I then pay into the LOC.
Leaving a $30000 dollar buffer in the LOC I am the left with $100000 for a deposit on an IP when I am ready.

I realise I am over simplfying things and the values I used are rough guesses not actual values but is my thinking on the right track or way off?

Sounds fine from what you've told us.