64 | Case study: mid 30s couple, combined income of $150k p.a, existing PPOR and two IPs

It has been quite some time since our last case study so this time on The Property Couch, Bryce and Ben will be discussing one of the case studies that we’ve received from our fellow listeners! Here’s what Tom wrote to us:

After listening to Episode 56 where you discussed various other case studies I thought I might write in to see if you were interested in discussing our situation. I’ll try and keep it short!

About 18 months ago we signed another contract, this time on a 4-bed H & L in Doolandella, 18kms out of Brisbane for circa $400k. After a long land settlement, this was completed yesterday and will be advertised for rent tomorrow. Looking at about a 4.9% yield. Again, this is on an interest-only loan at 90%. Deposit and costs were paid from our savings – I know, huge mistake!

We have just had our first child and Kirby is now off work. We have a ~$45k buffer in our PPOR offset and somehow are still managing to save, even though Kirby is off work, although receiving maternity leave payments.

We use a credit card to pay for 95% of our spending and repay at the end of every month to ensure no interest payments.

So, we are still very keen to use the property as our investment vehicle and have learned so much in the last year but are now stuck as to our next step. We doubt we would have enough equity to purchase again now and the fact Kirby is off work will severely hamper our serviceability. She will return to work at the start of 2017.

Questions:

• Do we sell both/one of our current properties? We’d like to keep it if possible as I am a firm believer in buy and hold, although will they hamper us moving forward?
• Where to from here?

Any information from you would be extremely appreciated. I’m sure there are a number of people who have used ‘property spruikers’ such as these to purchase less-than-ideal investments.

If you like this case study episode, don’t forget to rate us on our iTunes channel (The Property Couch Podcast) and our Facebook page. Any questions or ideas? Feel free to drop us your thoughts

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