Saturday, February 16, 2013

We got a tenant! Now we need a house of our own...

We got a tenant into the house this week on Tuesday, and got our very first deposit from the real estate into the bank account on the 15th which was UNBELIEVABLY exciting! There's nothing I like more than credits in the bank.

I am an investment property owner. Go me.

Our first home. Now our first investment property
Admittedly I am also a renter and no longer have my own home, but I am sticking with the pride that comes with being a rental property owner instead.

Mind you, it won't be for long. After doing lots of reading up on the tax situation associated with the mortgage, I've realised we really aren't in the right position. The mortgage on the house is relatively low, because I have been plugging away at it consistently for the last 10 years. So low in fact that the rent we are receiving is higher than the interest on the mortgage, so we are positively geared. For the time being the mortgage is also still Principal and Interest (which I know is supposed to be a big investment no-no), so the rent payments are helping to pay off the house nicely so that we can continue to build equity for our future home.

Once I return to work and we are ready to buy a new owner occupied home, we need to sell the investment property. Otherwise we are going to end up in the ridiculous position of having a high mortgage on the house we are living in, and a low mortgage on the tax deductible debt that is attached to an investment property. A mortgage so low it attracts a tax payment no less.

For now, the plan is that we will live in this granny flat for a few weeks to get up a bond and 4 weeks rent in advance (because I'm too tight to dip into the savings when there is any other option), and move to a rental home within walking distance of school. I plan to rent for more or less the same amount we are receiving for our own property, so that we end up in a bit of a break even position. A positive position even since all of a sudden we will quality for rent assistance from Centrelink (go figure) as well as all the petrol I will save not driving 30 minutes each way twice a day getting Maddy to and from school.

If everything goes to plan I will return to full time work in February 2014, and we will start looking at buying a new home to live in after that. In the meantime, I want to enjoy my time off with the babies, and I want it to be as long as possible, and keeping our costs down is a huge part of that. This move to a rental property is the right one not only for Maddy, but for our budget. And the babies and I will recover 2 hours in our day every day in not driving Maddy to school. That's incredible.

I can think of plenty of things to do with 2 hours every day. Sleep in for starters.

Do you think these two will let me sleep in with the extra time?
Would you be willing to downsize your home in order to save money? 

No comments:

Post a Comment

I LOVE comments. They make my day even if you only say Hi!