Browse Forums General Discussion 1 Aug 23, 2007 11:13 pm I bought my first place 12 months ago. Its a nice place and I owe about 250k on it.
My dear old nanna had a stroke 6 months ago and it looks now like she'll never return home. My family doesn't want to sell her home because it is a very unique place, a really big pre war farmhouse on 3/4 acre in the middle of a densely populated suburb. Its the original homestead from when the entire suburb plus more was the family farm, 3/4 acre being all that was left after the govt resumed like crazy in the post war boom for residential development. I've been offered the chance to move in there rent free for as long as I want because they won't let it go and they don't want to rent it commercially. They also don't want it vacant and therefore becoming derelict. The whole family is happy to sign a 10 year agreement if I want!!! This would mean obviously that I could rent my current place thereby having it 3/4 pay for itself. Would have worked wonderfully if I had never bought my place Laughing The big issue is it would basically otherwise be a rental arrangement even though, so no renovating beyond maybe a coat of paint Sad It would never feel like ours Sad I don't know that I could live in someone elses house for a long time when I can afford my own. I would like to help the family but just don't know that I could get past the inability to make it mine/ ours Confused It fits our needs I guess except for three things. The first is really minor in that there's just the two of us and 2 furry smelly kids so we only need 1 bedroom... there's 4. So that's a lot of wasted space. Second and more importantly we need a space for entertaining guests, you know somewhere comfortable for a half to a dozen guests at any time. There is nowhere for this and we can't alter anything drastically to make that work, so it doesn't suit our needs in that respect. We are about to open up the bottom of our current place and it will happily do that. Thirdly the furkids need 6 foot fences and the entire 3/4 acre has 3 foot fences Confused I would need to upgrade nearly 600m of fence Shocked What would you do in my situation Question Moving into the rent free place seems like the economically sensible thing to do but might hinder our lifestyle pretty terribly. I wish I could afford to buy the place from the family but that won't be happening Laughing Thought I'd ask here to see if anyone sees things from angles I'm not seeing Smile My missus and I both work in good professional roles (we have 4 degrees between us.. I know losers) and make good money, all the same repayment free is nothing to sneeze at, we're not wealthy by anyones measure! We also can't have kids with 2 legs so that's not a consideration. Thanks everyone ps apologies moderators if this is in the wrong place.... seemed like the most general area to me Re: What would you do? 2Aug 23, 2007 11:25 pm Sorry about your Nanna.
Do you want to do it just so that you could earn money renting your own place while not being happy at your Nanna's? Is it worth it then? Are you the only person in the family that could possibly move into the house? Would you be happy to see the place being sold? If yes, but someone else in the family isn't, would they want to move in? On the other hand, if you're happy with money you get from renting your place out, there will probably be a cent or two to fix the fence for your pets? Surely you'll be able to have your own furniture, fix the place so that it looks and feels comfortable to you and your wife? That's as much insight as I can master. Good luck with it. Re: What would you do? 3Aug 24, 2007 9:15 am thanks Mek.
there is literally no one in the family who could move in believe it or not. All the other kids are between 9 and 15 for the entire extended family and the adults are all well settled in their places of 10 years or more I would hate to see the place sold though, as would the everyone else... so thats not really an option. You summed up my thoughts so far in your 2nd line there The money and helping the family are really attractive but at what cost to everyday living Re: What would you do? 4Aug 24, 2007 9:49 am I understand your lifestyle needs, as our family life is similar - 2 good incomes & the only 'kids' are furry.
Personally, I think if you do move in, you'll regret it. You have already planned your current house around your lifestyle & needs, and suiting you & your family's lifestyle is far more important than anything else in a house. However, you have nothing to lose by trying it for 6 months to a year. Is there any way you could set up a smaller 'dog run' or similar in an immediate area behind the house (ie less cost) to accommodate the furry kids outdoor needs? Maybe you can get a reliable short term tenant for your current house. Perhaps you may know someone building a new house soon who needs to sell & rent while they build? Might be worth a try. Re: What would you do? 5Aug 24, 2007 9:59 am Oh..when I first read this I thought you had hairy kids. Bit cruel I thought.
Now realise you are in fact referring to the pet variety. I retract my cruel thoughts. Re: What would you do? 6Aug 24, 2007 11:42 am Cookie - They might not be dogs either - Could be tigers or something - ie the 6 foot high fences
Seriously Mick Reading your post - In your heart you do not want to do it - So listen to your inner instincts. They are normally right. If the chance of living rent free and all the other bits do not excite you - then there is no point changing your lifestyle or desires to entertain etc etc - Unless in your heart and desires you want to live there - If saving $15K per year (or therabouts) with someone else paying your mortgage does not do it for you - then stay as you are and let the family sort out what needs to be done - without making you feel under pressure to do it. When our loved ones lose their ability to manage for themselves is never an easy thing and at sometime the family will have to deal with the property. Personally I think they are better off to look at getting in a house sitter - who wants to look after the place as is - rent free who will treat it differently to a "Renter". They can also be on a get out within 4 weeks schedule so when nana is better she can move back in. Hope this helps. Steve Re: What would you do? 7Aug 24, 2007 12:23 pm -mick- This would mean obviously that I could rent my current place thereby having it 3/4 pay for itself. One option is to use this as an opportunity to enrich your family. Buy/build 3 more (similarly priced) houses and rent them out . Monthly payments should be the same as you currently are paying. 10 Years later you can sell all 4 and move into a mansion or maybe even if you prefer, buy your nannas place. Now knowing that you are going to make a pile of money in 10 years, you can put some into your nannas house and forget about the loss at the end as it should be dwarfed by the money you will make on the sale of 4 houses. Even better still if you do buy your nannas house, you will get to keep the improvements. I am curious that you are talking about 10 years. Do you realistically think that it will go up for sale in 10 years? ie. would there be a likelyhood of roling to another 10 years? I have never lived in one house for 10 years, so that is another consideration, are you likely to move on. Ultimately this is a choice you are going to have to make for yourself but the idea I list above might give you something else to deciede from. Good Luck Re: What would you do? 9Aug 24, 2007 4:29 pm we only need one room for the two of us Good idea but even the biggest bedroom/ sitting area is pretty small by todays standards. Old places like that didn't have big rooms... our ideals have changed a lot over time
Yes it is a free 15k though that much is hard to ignore No I don't think it would be sold in another 10 yrs but there would be a lot of young ones coming to an age in the family then where they would have a greater need than me for that kind of opportunity, I'm just a seat warmer The idea of buying more properties did cross my mind but was still juggling numbers on that one. I was more focused in the short term on whether I could deal with the living arrangement in that time..... the financial sense was never a question! I doubt I'd move far either, we're both very rooted in this one locality along with the enitre family. I may move to a bigger better house but still close by (hence dear nan's place is attractive... if I could alter it). I could probably do something creative with a dog run yes... could see a way out of that one. Yak Chat nanna won't be moving back in. She had a serious stroke, the kind you don't recover from I'm afraid You may be right about the instincts, same as commodore nut there. I guess it boils down to $ vs lifestyle at this point hey........ Thanks all for the ideas. It helps to talk things out sometimes with people who aren't involved. I owe everyone a beer Oh yeah I have 2 dogs too, not hairy maonkey bigfoot children sorry for any confusion Re: What would you do? 10Aug 24, 2007 7:31 pm Just a thought, 3/4 acre is huge. You mentioned it's in "densely populated suburb". What about do some division and sell part of the land? As long as the house is still there, you/your family can have extra money to do whatever is required? Re: What would you do? 11Aug 25, 2007 1:12 pm mmm you know we all spent so much time thinking of ways to avoid selling/ developing we never did consider a partial effort keeping the existing house. I'll have a think about that one thanks Re: What would you do? 12Sep 27, 2007 9:48 am I need to revive this everyone
I found out some interesting news recently that has changed my mind on this situation. The house I own is next to public housing tenanted by rather elderly people. They have been told that when they leave (ie pass away), the existing dwelling will be removed and replaced with public housing units along with the property behind them. Now I don't want to live next to units, let alone public housing units! What this now means is that I can't really renovate my current place as I would have before or spend money on capital improvements. So I'm considering a few options now in this light. The main one is sell the property I'm in now, take any small profit and hold onto it. Might clear 5 or 10k after fees and tax. Then live in Nanna's place rent free for 12 months and save my 500-600 per week. This will give me 25-30k + any profit from the house after a year which will well and truly cover all my fees for a new place around 350k (mortgage insurance, stamp duty and so on). If I keep the old place I would need to stay at Nanna's for 5yrs + to make it financially viable, which isn't a feasible option in terms of lifestyle for us. I think this approach is the best balance of economic sense and lifestyle. I really considered the option mentioned above by 3xbuilda of buying 3 or 4 investment properties and using the rent to pay for them plus make up the difference. Its a great idea and would have the best ultimate pay off BUT it would be a long term option again. I don't see anyway of turning a good profit in 12 or 18 months with this option If anyone has any clever ideas on this one please do tell. Re: What would you do? 13Sep 28, 2007 1:45 am If you are getting public housing units next door I would sell sell sell, before they are built, started or even a sign telling anyone about them the timing would depend on the situation next door but dont leave it too late. Then I would look at buying straight back into the market and not waiting around for 12months saving your cash as any slight rise in the market and it will chew into the money you have been saving. If I could find a great house you like that may even need a lick of paint and rent it out for the time you stay in your nanna's so you can collect the rent to put to your mortgage and also put the money your saving by not having rent or a mortgage in your nanna's house into your new home as well effectively paying double payments or close too.
Sorry forgot to say to make it clear what ever you do dont put yourself in a situation where you own nothing in the housing market at any point. Re: What would you do? 14Sep 28, 2007 10:55 am yeah a few people have said that to me now... don't get out of the market entirely. You're right though the talk of housing units means now is the time to bail from that one! I couldn't think of a quicker way to devalue the property!
The establishment costs on a new loan are the big stumbling block right now I guess. 20k in mortgage insurance, stamp duty etc that would be needed upfront. Hence the idea of pulling out for 12 months and saving these fees up.... plus a little more. Re: What would you do? 15Sep 28, 2007 11:28 am -mick- The establishment costs on a new loan are the big stumbling block right now I guess. 20k in mortgage insurance, stamp duty etc that would be needed upfront. Hence the idea of pulling out for 12 months and saving these fees up.... plus a little more. 20K mortgage insurance!?! Are you sure? Have you borrowed millions? Re: What would you do? 16Sep 28, 2007 11:44 am # Loan amount required :
$350,000.00 Purchase stamp duty : $4,250.00 Mortgage stamp duty : $1,120.00 * Mortgage insurance : $12,944.35 From the wizard home loans purchase cost calculator. Plus legal fees and loan establishment fees is about 20k These are all the upfronts. I don't have a spare 20k at the moment... hence my original plan was to leave the market for a year and save it in cash plus a bit extra..... Re: What would you do? 17Sep 28, 2007 11:48 am I think i have a solution for you.
We will move into your Nanna's house for ten years rent free. We are fairly reclusive so don't need entertaining areas and we have no children - just two guinea pigs which will suit the 3 foot fences just fine. You can sell your current house if you wish to get away from public housing (although i grew up in public housing and i too now possess a degree - we don't all end up on the dole!). Then buy another one to live in. Alternatively we could throw in ....say...$100 for rent a week. And you can use that money on your mortgage. How does that sound? Re: What would you do? 18Sep 28, 2007 11:54 am Then after every few months, build an extension of extra room at the back, rent it out for $100 per week...
Few years later, you will have enough money to buy another property without that huge insurance cost... Re: What would you do? 19Sep 28, 2007 12:12 pm -mick- # Loan amount required : $350,000.00 Purchase stamp duty : $4,250.00 Mortgage stamp duty : $1,120.00 * Mortgage insurance : $12,944.35 From the wizard home loans purchase cost calculator. Plus legal fees and loan establishment fees is about 20k These are all the upfronts. I don't have a spare 20k at the moment... hence my original plan was to leave the market for a year and save it in cash plus a bit extra..... Is that a 100% loan? Re: What would you do? 20Oct 23, 2007 1:47 pm sorry cookiemonster yes it is. I realise the rate would be less with some kind of deposit in hand..... anyway its all a moot point now I didn't mean to leave you hanging I just stopped checking back when the answers became less than helpful
Thanks to those who helped in the thought process there. In the end common sense won out and we're going to move into the free place for at least a year, two if it works out nicely. I've had the house (my house) revalued at roughly 310k now which is a 60k capital gain over my purchase price 12 months ago (I knew the area was an up and comer). We're going to hang on to it and have a tenant sewn up who is the daughter of a family friend so we know we can trust them. We'll rent it to them for as long as we live at Nannas and the gap between rental income and repayment is $140 per week which is fine. This way we stay in the market and continue to receive any more capital growth in the area, which since we are going to look around the same area again will protect us from increases there. We have lived there longer than 12 months so are able to avoid capital gains tax when we sell, we can rent for up to 6 or 7 years without losing that status I've moved up to a new job with really good pay and between us we will be able to save at least $1000 after tax per week without sacrificing anything in terms of lifestyle and happily servicing the mortgage etc (plus a new car.... thats not optional cause the other halfs little 4by is suffering!). So after 12 months we will have 50k savings plus the 60k profit on the house and however much more it grows in the meantime. Take out a few fees and such we'll have 100k to go house hunting with in 12 months which means no mortgage insurance etc for us (we'll be shopping in the 400 - 450k bracket). The longer we stay the more we can save which is great! We might even have to consider building at the end because we will have a free place to stay while its being constructed! If we built later in life no way would we have such an option! Cross that bridge when we get there though Thanks again guys and girls, it was a hard decision but your advice did help Bought in Nov 21 at the height of the market (classic). Good area, atrocious floor plan. BUT has land out to the left-hand side that we can extend out on (see second… 0 6694 Thanks mate. Yeah good points! Leaning towards Option 3 to get a bit extra space in the cabinets but not going too crazy high (and expensive). Would require a mini… 13 30522 Hi It came to my attention after the handover that - The facade cladding on the face and the side are not straight. -The face tapers down by 50mm from left to right and… 0 888 |