My wife and I owner built a property near the coast and moved in last october.We bought the land for $49,000. Blocks are now selling for between $150,000 and $165,000.Since selling my business last year and buying another business my income has dropped.The position my wife are in at this moment in time is that we currently have a mortgage of $145,000.Our house has been valued at between $450,000 and $485,000.We propose to sell our house in november through auction.
At present there is a block of land for sale at $135,000 in the area. This land has increased by $10,000 in just six weeks.We are proposing to put down a 5% deposit on the land to secure it with settlement on the land being in march 2004.
Our aim is to reduce our mortgage by approx $100,000.by building again.
My question is would I be better off doing this or stay in the rental property and invest in property and invest the $300,000 odd in property as laid out in Steve Mcnight,s book.I would appreciate any advie.The greatest asset you have is YOUR ABILITY TO EARN AN INCOME, ie a job. You have sold your business, but can make money working as an owner builder. You have about $300k – $340k equity, which I would say is not enough to quit working. Buying the land and duplicating your success sounds like a good idea to me.
“Our aim is to reduce our mortgage by approx $100,000” why are so many people obsessed with paying off their mortgage? Its not like interest rates are 17%. At 6%, its better to invest any excess cash at say 9% (plenty of funds guarantee this) than to reduce your mortgage which is costing you 6%. The difference of 3% is well worth utilising.
re Steve’s book, if you think you can beat all the other sheep to the gold (assuming there is any left) good luck to ya. Im not buying the top of the market. If you want an alternative, buy positive geared shares on margin.I got a question pert: Is your current loan 145k placing a strain on your finances (ie hard to service)? I think that is the crux for determing if you should sell or refinance to invest (though I could be wrong).
Atm you say you have around 305k equity (450 property – 145 mortgage). At 80% LVR you could borrow 244k to be used for investing purposes.
However, if you sell (leaving you with roughly 305k cash, I’ll ignore costs) – how much would it cost you to rebuild? Already you’ve said the land is about 135k, so that leaves you with 170k to build a house. That’s not much – is it enough to build a house for you?
This brings me back to my first question. If the reason for selling is cause of strain on your finances, I don’t think it’s wise to get MORE loans that might be unservicable for you too.
So while selling doesn’t seem the best, it might be the best option.
Man – I hope that makes sense cause I kinda forgot what I was trying to say… LoL. Sorry. [
]g’day crashy
i know this is a differnt forum but need some advise on buying some +ve geared shares on margin.
im still not that convinced about the share market so was wondering is there a ‘fund’ that is positive that will allow you to gear??
is this possible – if not got any suggestions??
cheers
no fund that I know of, I would run one if someone lent me their dealers licence
like positive geared properties, positive geared shares do exist, just have to find them. the difference is, you dont have to beat anyone to them.
I got a question pert: Is your current loan 145k placing a strain on your finances (ie hard to service)? I think that is the crux for determing if you should sell or refinance to invest (though I could be wrong).Atm you say you have around 305k equity (450 property – 145 mortgage). At 80% LVR you could borrow 244k to be used for investing purposes.
However, if you sell (leaving you with roughly 305k cash, I’ll ignore costs) – how much would it cost you to rebuild? Already you’ve said the land is about 135k, so that leaves you with 170k to build a house. That’s not much – is it enough to build a house for you?
This brings me back to my first question. If the reason for selling is cause of strain on your finances, I don’t think it’s wise to get MORE loans that might be unservicable for you too.
So while selling doesn’t seem the best, it might be the best option.
Man – I hope that makes sense cause I kinda forgot what I was trying to say… LoL. Sorry. [
]Current mortgage is a strain.If interesr rates go up then we could lose house.
$170,000 to build is not huge but getting a mortgage for say $50,000 and building with someone like metricon would infact get me a 27sq house for 95,000 less the mortgage we have at the moment.taking into account the land value around the area and being close to the sea (not with views),In this area a house of 27sqs is selling for $425,000to455,000 giving us a property with approx380,000to 400,000equity but only with a mortgage of50,000 rather than the current $145,000.if you can build and make such a profit it sounds worth it. could you rent your house out and rent another cheaper one to live in? – just whilst building – and then sell one to pay off the other?
good luck.Pert: If your current mortgate is a strain, then I’d definitely say to sell up and rebuild – providing you come out ahead if you take that course.
Good luck mate!
if you can build and make such a profit it sounds worth it. could you rent your house out and rent another cheaper one to live in? – just whilst building – and then sell one to pay off the other?
good luck.True I could rent mine for $350.00 per week and rent another cheeper one but I need to sell mine to raise the finance to build. even if I borrowed 80% of the equity which would be approx $240,000. This would not be enough to buy the land $135,000 and build approx 170,000.
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