what to do how to do it.

[jpr777]

Hi ppl I have a headspin of decisions to make. scary
our situation,
my partner and i have a house in a regional w.a town worth 300,000 to date.
we owe 130,000.
our combined salary income is 225,000 with no kids as yet.our max borrowing capicity is 1.5m.
we both only scrape through with not paying tax.(only just)
we are looking at having kids in two and a half to three years, in which my partner will go on 6 month parental leave through work, 12 months in total off work.
we would like to move back to the a.c.t in four years as that is where our family's are.
the problem is since we have been gone the a.c.t market has gone silly and we are afraid of having a huge morgage when there.
should we get two investments now one in a.c.t and other elsewhere on i/o loans and one in each or go for one in a.c.t and claim on that for 4 years neg gear.
what would be a good stratagy to make this happen?
any thoughts would be appreciated.

 

[sapphire101]

Do Your Figures

Hi JPR,

First work out what you can repay comfortably over a 4-5 year period without it affecting your current lifestyle. Do your budget. That will tell you what loan amount you are ok with. Do you really want to be $1m in debt?

The loan amount and your comfort zone will indicate what you can purchase anywhere in Australia. ACT or anywhere.

Then you have to decide what your strategy is to invest money. Obviously for a return but what is that return. Just buying a house is pretty short sighted. There are plenty of ways to invest money and property is only one, but the outcome is usually the same. To be financially free or at least secure to release time for me to spend as I wish. Investment: Money = Time = Freedom

If your strategy is a good one, then with the availability of over $1m you could build yourself a considerable portfolio in 4 years and have no need to buy in the ACT. It may be more viable to rent the place of your dreams!

Just investing money (buying a negatively geared property) and hoping the market rises is a scarey way to invest anything. As they say anyone can make money in a boom and many people luck out with their timing, not knowing anything about the fundamentals, but we aren't in a boom and you have to take control of your strategy and create the value. Buy well, be in a position to add value as many ways as possible and have multiple exit strategies in case the market or your situation changes. This way you insure yourself and your investment.

sapphire101