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Yes, but to sell an IP to pay off deductible debt, and then re-borrow to buy IPs again..... I'd have to look at the numbers a lot more. CGT, agents fees, etc. really add up.
Alex
OPTION A:
Pay off $240K debt on $400K PPOR in 10 years and THEN sell and upgrade.
OPTION B:
Sell current $400K PPOR immediately and upgrade to $600K PPOR with $440K mortgage (minimising asset exposure and serviceability for IPs); OR
OPTION C:
Use the same money I would use to pay off $600K PPOR in Option B to continue paying off $400K PPOR as well as one, two or three cheaper IPs (already acquired one worth $330K). This way, rather than having $400K of asset exposure I would have maybe $1M-$1.5M. Then, after 5 years or so (depending on market conditions) I can sell off the PPOR and one or all of the investment properties in order to upgrade to the up-market PPOR with a much lower LVR. Then I would borrow against that equity to purchase IPs once again.
It's human nature . It's easier to whinge that to work things out. The media is on the whingers' side too which makes it "OK".whinge about not being able to buy your own home.
I see. I thought you've won lotto or somethingSale of other assets at first
That's an accepted risk, at least we can still service the loan and keep the PPOR.If the variables are going up, you have probably missed the fixed rate boat! Maybe part fixed, but I wouldn't be taking fixed just now.
...any comments anyone?
Yes i'll admit our repayments are huge....and we arent the average 21 year olds...but we're doing this for our future...any comments anyone?
Good on you both. I wish I had been in your situation when I was 21. Took me years and years to get there. You are both doing v well.we're doing this for our future...any comments anyone?
There you go; you know that you're an anomaly. Let the average smirks and move on. We'll see who smirks in 5-10 years time .we arent the average 21 year olds...but we're doing this for our future...any comments anyone?
people's perception of HUGE differs, for instance I would qualify a 2m+ deposit as huge, anyway I hate NDD and am wrestling with myself to borrow more for some PPOR improvement. Unless you are on a few hundred k a year I would think that the interest, say @ 8.1% = 44k odd of non-deductable debt a big burden and an obstacle to create wealth, unless of course you've purchased something with development potential.we spent stupid bucks getting into Burns Beach - less than 200m to the beach.
with our combined deposit we got the total mortgage to under $550k after house is built - which for anyone considering buying in the dress circle of Burns, will understand thats a HUGE deposit.
i am self employed and earning pretty good money and trying my damndest to earn more. while my ability to gear myself further is very limited now, i have wealth building strategies in the wings to increase my offset mortgage account size to eliminate the interest component of the mortgage. i can then pay down the principle and when paid i can withdraw over $550k in cash and go play. i have no serious cc debt (<$1000) either.
does that sound like a good thing to be doing? i still question it sometimes.
My gf and I have a 370k mortgage on our PPOR...we're mid 20s, make 100k+, and don't really have an issue with it? The house is worth a crapload more than the mortgage now and because we're young (which is apparently this massive problem if you have a mortgage) our incomes are only going to go up.
If you're young and have property you're irresponsible, too young to be in debt, too young to have "that sort of responsibility", etc. If you're young and don't have property you're a Gen-Y delinquent with no work ethic or future. You can't win.
Don't care what people say. I've been carrying debt for years. The people who tell you 'you're too young' (especially your peers) are going to be the ones running around like headless chickens in later years when they have kids and have to buy houses. Stick with it and you'll be SO much better off.
Alex
This is EXACTLY what has happened to me. About 5 years ago (when I was 27) we were buying our first PPOR, and by the standards of the time it was a fairly good one.