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Having just returned from working overseas my wife and I are currently living in our one and only investment property (a townhouse) in Far North Queensland. It just happened to be vacant the week that we returned so it was simply convenient rather than ideal, while we found our feet and got work. We are now looking at buying a PPOR to live in but have found that my new salary (just under $50k pa) will only just cover our potential new mortgage on a $300k house plus living expenses. I have around $70k cash to contribute as equity plus own around 75% equity in the townhouse at its current value of $180k. My question is how do people manage in similar situations – I cant see myself being able to save anything to consider ever getting another IP – or should I look at selling the current IP and using the capital gain as down payment on two new IP’s ? Any ideas.
thanksHi, not knowing too much about your situation, whether or not you have kids, on reading your post my first thought was why not stay for a while in your IP which you owe very little on (unless I read it wrongly) and buy an IP which will have a big loan – all the interest will be tax deductible.
Each time we have sold an IP we have regretted it later, not to say we would have done differently – we only sold when we had to reduce high debt or to put money into making our own (tax free) PPOR more comfortable for us with three growing boys. But selling has diminished our holding, and after a boom I think “if only we still had that house”. However, I try not to look back and realise that compared to many, we are in a very comfortable position.
We are buy and hold types (generally) and we are negatively geared, which suits us well as our IPs are in high capital growth suburbs and our losses are more than made up in growth. I know this does not suit everyone, but it suits us.
I would try to hang onto your IP. Just my thoughts.
Wylie.
