Hello again from a one time previous poster, where the advice received was more than gratefully appreciated.
I have a meeting on Monday with a mortgage broker for my first property purchase (at the age of 36; aaarggh!). I have the potential to borrow up to 1.3 million, but am looking at a 2 bed apt in melbourne for about 850k. Great views/location etc etc blah blah blah. I have no other assets but no debts and annual gross income approx 300-400K. I plan to buy because my partner is working there, but only for the next yr or two. She seems to be thinking with her heart, while I am trying to be a rational male!
My question: Is it wise to invest in blue chip property like this, or would it be better to rent at say $400.00 p/w for the 2 yrs we will be there, and buy 3 suburban properties at the total cost of the price of the apt, e.g. 300k each?
Depends on two things – the numbers, and whether you care about the numbers or are focussing on lifestyle.
You need to add up the additional costs (purchase and ongoing) in buying 3 versus one, and the rents incoming, and deduct your rent. Then you need to estimate growth from the three versus the one (tricky of course, but history may guide) over the two years. And if the numbers matter to you, go with the best deal.
However as it's your PPOR, you also need to consider the lifestyle aspects. You may choose the more expensive option for the security and comfort of having a nice PPOR.
Whichever way you go, with your income you should be able to make a dent in the loan/s pretty quickly.