Hi everyone, I would like your opinion what is the next best move. I have about $100k in equity on my home, I still have about $100k on my morgage to go, I have no cash, my car needs replacing which I can't afford…so I guess I just have to continue to put up with it. I have kids and the house is getting abit small, I've been thinking about going for an intrest only loan ao I can use the tax rebates to pay my home loan off. Or should I try an renovate my home and sell it for a larger home? Or should I buy a larger IP and move in there and rent out my former home? What did you do and was it a good move, or would you do something else? And considering the US Banks crashing, are housing prices going down, if I buy now, would I lose money?
Buy another IP at the low end of the market, then rent both properies out. You move into a rental property slightly bigger then what you have now. you will need to change your current home loan to Interest Only and make sure that your new loan is also interest only.
Benefits:
Both Loans are tax deducable
The rent you collect from one IP pays for you rental home but its tax deducableSome handy links for you to read
http://www.theage.com.au/news/property/home-in-on-tax-lurk/2008/07/28/1217097144054.html
http://www.ato.gov.au/corporate/content.asp?doc=/content/86191.htmThe longer you can deal with living with what you have, the better. New cars depeciate like you wouldnt believe! I go from one $500 car to the next and im way infront
Pay your 100k home loan off, Then start thinking about getting greedy
jo45,
1) Would help better if you put some figures in regards to current value.
2) You appear to have a serious cash flow management problem (no cash, can't afford to replace car) so an IP doesn't sound like the best idea for you. If something goes wrong with the IP do you have money to fix it? Not everything is covered by insurance.
3) Depending on the value of your current home and location are you able to sell it and find a larger house in a different location or a slightly run down larger house that you can improve over time.
4) Depending on the area some prices will go down but other areas will increase.
5) Is it possible to rent your home out for more than what you would pay in rent if you moved to a larger house?
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