OK…..a debate with my good wife, goes something like this.
1. We have a house in Frankston South…worth around the 460 mark, and owe 160.
2. We have an Invest property in Frankston…worth around the 250 mark, and owe 190.If we sold 'the keeping up with the jones house' in F'ston south we could pay out the one in Frankston and outright own this and be mortage free.
We could then touch up this house in Frankston and maybe in 2 -3 years get around the 280 mark for it.
Then my idea is to use that equity to maybe do something else.
I want to sell and be debt free……she wants to stay in the lusher part of frankston south and keep up with the jones.
What would you guys and girls do?
Im showing her all these responses by the way!
Hi wriggles
At a minium I would keep both properties. If it were me, I'd be refinancing Frankston South property and buying another IP. Good luck.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
I' m with Paul.
Being personal debt free is nice, but being in Frankston with 2 properties is a good position, and worth the sacrifice now i.m.h.o. You'll regret selling there in the future I reckon; it's on the way up.
I know South Frankston very well. Stay there as long as you can.so far 2 to 1 in favour of my wife.
Thanks for your responses.
Hi Wriggles. Nice position to be in.
You posed the question:
"What would you guys and girls do?"And gave the options as:
– "sell and be debt free"
– "keep up with the jones"This is an easy one for me. As I have no interest in comparing myself to other people (particularly those kind of people), "keep up with the jones" is out so the only alternative given is "sell and be debt free". Regardless, I've chosen the second option myself and it hasn't been unkind to me at all! It's nice to be able to grow my investments a few thousand a month without any leverage whatsoever.
Sure, I'm pretty bearish on residential real estate at the moment but if I'm wrong I've got one or two (depending on accounting method!) houses worth of equity that will grow. It's the ultimate win-win!
And of course, the final thing I'd do is ask my wife to read “Affluenza” by Clive Hamilton, “Affluenza” by Oliver James, “The High Price of Materialism” by Tim Kasser, “Paradox of Choice” by Barry Schwartz and “The Overspent American” by Juliet Schor. Just for starters.
By then I should have finished writing my essay called "How living in a small home changed my life and why I would recommend it to anbody who feels constantly stressed, pressured or pressed for time"! Seriously.
The only reason i thought of selling the F'ston south home because like i said we would be mortage free. We could live off my wifes wage easily and be able to bank $1000 (my wage) a week in savings to do something else in 6 months to a year.
Hard decision, but i can see your points as well.
Could we still borrow against out home in Frankston south even though we borrowed against it for the invest property in frankston?wriggles wrote:We could live off my wifes wage easily and be able to bank $1000 (my wage) a week in savingsSounds like a fairly sound strategy (Note: I know nothing! Talk to a professional)! Bankwest will turn that into $54,000 in a year at minimum risk (disclaimer ditto).
Weight that against the possibility of the bigger house appreciating $54,000 over 12 months if you sold it. Remember, the house price could go up, sideways or down.Good luck,
F. [cowboy2]thanks foundation.
i would get them to a positive cashflow position. Dont know the exact figures but they seem to be close. Then the jobs done.
1: They'll pay for themselfs 2: The equity will keep rising and you can still bank the $1000 a week.Am i wrong?
My thoughts are to keep the 2 properties and buy another. It's hard to go backwards and I think in another 3 years you'll be glad you didnt't sell. My view is having a small mortgage is no big deal. Your better to focus on continuing to invest if you can afford to. I think your in for plenty of growth.
wriggles wrote:The only reason i thought of selling the F'ston south home because like i said we would be mortage free. We could live off my wifes wage easily and be able to bank $1000 (my wage) a week in savings to do something else in 6 months to a year.
Hard decision, but i can see your points as well.
Could we still borrow against out home in Frankston south even though we borrowed against it for the invest property in frankston?You can burrow up to 80% of the house valuation. i.e. $368K – $160K ( current loan).
Whether you should is of cause another question.
Good luck
ElkaWe purchased 3 investment properties over the space of 3 years with the sole focus of getting a cashflow positive return and getting a quick capital gain to pay off our primary residence and get rid of non deductible debt. We sold 2 this year and are debt free except for the 3rd investment property which we will keep – we have freed up some cashflow and are now looking to purchase further investment properties to now replace our incomes.
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