I need some advice plz with moving.

[BLKWDW]

Hey fellow my swaggers i'm writing this as i need some advice.

Currently we live in cowra, nsw but are wanting to move. Biggest reason we want to move is because of my working situation. i left an interstate job as my wife got sick of me being home for 1 day a week so took up a job with anl who i used to work for but this time and driving trucks for them. The job is good i have no complaints about it but the problem is i'm still not gauranteed to get home everynight like me and the wife want.

I am home most nights but there are also weeks where i'm not home at all it all depends on where the work is. Now we want to move to lithgow as this will get me home everynight know matter what happens as i have to drive through there on my either to syd or back out west to deliver the products. Plus if i ever left this job or got the sack its on the major trucking route for a heap of companies heading from syd out west or vice versa so getting another job shouldnt be to hard. There are a few other reasons we want to move as well but thats the major one.

Now the problem is that we own the house in cowra and cant exactly just pack up and move on at the drop of a hat. We would have to finish the renos on the house to sell up and move but the other issue is we wont have enough money for a deposit on another house. We'll have some but not what we need. I have thought about just selling up and renting but i would really like my own house again and worried if i do rent i'll never get back into my own house again.

Now we had a bit in the savings account but after buying a few things, me having a couple of unpaid weeks of work when i baby was born in sept and needing a new car that seated 6 instead of 5 it has dwindled down to around 6k now and plus the mrs is of on maternity leave so where down one income.

I want to move asap as living in lithgow will also allow me to make an extra 2-300 a week with work.
How i can get into a situation to be able to afford to move well thats what i need advice on what best options i have. Bar selling up and renting the only real logical option that i have come up is to hang here for another 6 months spend what we can afford on doing the house up, use a grand our of the 6k we have left to help with that, invest the 5k in a short term investment of some sort and hopefully after july we'll have a good tax payout and then with the extra equity in the house we hope to have plus the tax money and whatever we make from investing the 5k we'll be somewhat on our way to having the funds to move.

What are your opinions on thsi option and what other advice/options could you give me?

Thanks Darren!

[britts]

Hang in there get the equity back into the house you own now, speak to your accountant regards negitive gearing, eg rent in lithgow and rent out the one you already own, & congrats on the new bub.

[Nomad]

Hi Darren,

What reno's have you got to complete before putting the house on the market, and I mean bare minimum before it can be presented for sale?

Here are some thoughts and ideas for you to consider:

1. When is the selling market most active in the area you live in?
2. When is the buying market the least active in Lithgo?
3. Given the state of the market at present it may be possible to rent a house that you might like to buy in Lithgo for the time it takes to renovate and sell your home in Cowra.
4. Whats the rental market in Cowra like, alot of people are choosing to rent rather than buy at present because of certain financial issues and the flexibility to be able to move. If your not going to realise what you thought you would get selling you may be better of renting and waiting for that market to improve.
5. By moving to Lithgo and then renovating your current home you will be able to claim this as a tax deduction and offset it against rental income, talk to your accountant to check though.
6. You have six years to sell your Cowra home under a CGT free scenario.
7. How friendly is your bank manager?

Heaps more to consider and it will be a bit of a juggle but we should be able to make a plan thats workable.

Cheers Nomad.

[BLKWDW]

Hang in there get the equity back into the house you own now, speak to your accountant regards negitive gearing, eg rent in lithgow and rent out the one you already own, & congrats on the new bub.

Thanks mate. We dont have an accountant but did see a financial advisor who was supposed to get back to us 2 months ago but hasnt says his having trouble sorting out the best way to go for us. Also reckons we cant afford to rent this out whilst renting/owning the other house.

Hi Darren,

What reno's have you got to complete before putting the house on the market, and I mean bare minimum before it can be presented for sale?

Here are some thoughts and ideas for you to consider:

1. When is the selling market most active in the area you live in?
2. When is the buying market the least active in Lithgo?
3. Given the state of the market at present it may be possible to rent a house that you might like to buy in Lithgo for the time it takes to renovate and sell your home in Cowra.
4. Whats the rental market in Cowra like, alot of people are choosing to rent rather than buy at present because of certain financial issues and the flexibility to be able to move. If your not going to realise what you thought you would get selling you may be better of renting and waiting for that market to improve.
5. By moving to Lithgo and then renovating your current home you will be able to claim this as a tax deduction and offset it against rental income, talk to your accountant to check though.
6. You have six years to sell your Cowra home under a CGT free scenario.
7. How friendly is your bank manager?

Heaps more to consider and it will be a bit of a juggle but we should be able to make a plan thats workable.

Cheers Nomad.

Renovation wise all we have to complete is the 4th bedroom extention we have added which is nearly done and then finish of the inside of the of the indoor/outdoor entertaining area( we built in our large pergola to make 2 rooms). Also some flooring in the front sunroom as the tiles cracked and i pulled them up. We were also goin got paint the rest of the house as all the bedrooms have just been painted. Pretty much tidy the place up after that.

1. Dont know an answer to this question. Being a small town the market hasnt really moved. We have put 25k or so into the house with new bathroom, kitchen, 2 new rooms etc and we were told it would be only worth 160k and we paid 148k for it bout 3-4yrs ago

2 Prob now. There is a few houses in our price range suiting our need there now that have been for sale for quite a while.

3. How would i rent a house i like to buy if its not for rent just for sale? It wont take long to finish the house once we get stuck in.
4. Havnt really researched that question as we were told we couldnt afford to rent it out.

5. Will have to get an accountant for this.

6. What is CGT?

7. Dont speak to my bank manager. The wife deals with all our finances.

I also should state also we have 2 personal loans that make things harder. One is around 13k and the other is around 18k

[BigJules]

Financial advisors have a different set of skills and interests from an accountant. They want you to invest money so they can make a commission. Not saying they're not good folks, just that they're not the experts in your financial situation.

I heard Finemores advertising for drivers last week. I know they've got that big depot in Orange.

[cassgazz]

One possibility, which is the way went, may be to re-finance you current house (once reno's are complete, as a valuation will be required), and use the extra $$$ as a deposit for a new house.
This will allow you to look for and purchase a new house, while selling the current house.

It may restrict finances for a while, having two mortgages, but once the current house sells, you'll be able to move on and get settled into the new house.

[BLKWDW]

Financial advisors have a different set of skills and interests from an accountant. They want you to invest money so they can make a commission. Not saying they're not good folks, just that they're not the experts in your financial situation.

I heard Finemores advertising for drivers last week. I know they've got that big depot in Orange.

Only way you would make the money i do at finemores is to do interstate plus my job is good i have a nice newish truck to drive and good blokes to work with.

One possibility, which is the way went, may be to re-finance you current house (once reno's are complete, as a valuation will be required), and use the extra $$$ as a deposit for a new house.
This will allow you to look for and purchase a new house, while selling the current house.

It may restrict finances for a while, having two mortgages, but once the current house sells, you'll be able to move on and get settled into the new house.

The idea sounds good but not sure if we'd still have the deposit in the house.

[dazzler]

Another option may be to finish off your renos (god I know how much hard work that is) so that you can maximise the value of your place.  Then sell but don't rush.  Once its sold rent the smallest place you can where you want to live (a unit, townhouse or similar).  Then buy some land and build.

The only reason I suggest this is if you have already done renos then you are a deft hand at this and probably wont be happy in most established places.  You may end up spending more than you thought. The purchase of land is cheaper in stamp duties and there are no hidden surprises and you have locked into the market.

Land goes up, not houses - just the land the house is sitting on

Good luck!

[morcon]

Hard to give any real advice without seeing your exact situation but a couple of simple comments from what I can see:
*Presentation sells houses, get your renos finished and have your house schmick before going to market. Price it right and it will sell.
*When sold, you can either rent a house in Lithgow, remembering that you'll be saving around $350 per week as you won't be paying your mortgage, rates, insurance etc + the extra $200 - $300 per week that you mentioned you would get paid by being in Lithgow. No idea what the Lithgow rental market is like but that should rent you something decent as a short term measure while you get ready to buy again.
*Alternatively, when you sell you can make an offer on a house in Lithgow. Again, no idea what the market is like in Lithgow but if it's anything like our market there are some very anxious sellers out there and some great deals to be had.
*With regards to your tax refund, you can apply to the ATO for a weekly reduction in your tax rather than an annual refund - it used to be called a 221D certificate but I think the name has changed - this may be a way to get your hands on some extra cash sooner rather than later.

Hope that gives you some ideas.

[Mrs smith]

I'd finish the reno's so the house is ready for presentation to the market, have the property valued. Consolidating your personal loans with the mortgage will give you a real world idea
of where your placed in the market and if you can draw a deposit against your existing property for another property or weather you buy something subject to the sale of yours knowing what its worth and is ready for market. This also gives the option of renting yours till its sold if things become tight or you become desperate for a few $$

[Kangaron]

I think I would go the other way.
What is more important to you, as in 'chase the big $'  or  be at home more.
Driving trucks chasing big $ you are not going to be home wherever you live.

I made the same choice 20 odd years ago, dropped $30k a year, lost a co car and some other benefits.
Looked till I found the right job that had to be only 4 days of dayshift, no more than 20 minutes from home.
It took me 7 months to find it but got my life, wife and kids back, plus a 3 day weekend.
Look at other options around you closely mate.

[dazzler]

I think I would go the other way.
What is more important to you, as in 'chase the big $'  or  be at home more.
Driving trucks chasing big $ you are not going to be home wherever you live.

I made the same choice 20 odd years ago, dropped $30k a year, lost a co car and some other benefits.
Looked till I found the right job that had to be only 4 days of dayshift, no more than 20 minutes from home.
It took me 7 months to find it but got my life, wife and kids back, plus a 3 day weekend.
Look at other options around you closely mate.

Good advice.

[jnik]

1. Dont know an answer to this question. Being a small town the market hasnt really moved. We have put 25k or so into the house with new bathroom, kitchen, 2 new rooms etc and we were told it would be only worth 160k and we paid 148k for it bout 3-4yrs ago

If you've already put $25k into it and only seen the value go up by $12k I'd be really hesitant to put any more money into it ... do what you can without spending too much.

3. How would i rent a house i like to buy if its not for rent just for sale?

If you see a house you like that has been on the market a long time and is vacant, there's a good chance the current owner would be happy to have a tenant.

6. What is CGT?

Capital Gains Tax ... the government normally taxes any increase in value (at time of sale) of an investment property.

As you currently live in the house you can nominate it as your "Principle Place of Residence" (PPoR), while you don't live there, for up to six years.

You don't pay CGT on your PPoR, but (obviously) you can only have one PPoR.

I also should state also we have 2 personal loans that make things harder. One is around 13k and the other is around 18k

These should be paid off ASAP ... can you get a line of credit on your house (at a lower rate than your personal loans) to pay these off? A trap to be weary of here though ... make sure you don't go and get more personal loans!


A couple of other points:

1. Keep all receipts for work on your house ... if you do rent it out and find you have to pay CGT, these receipts will reduce the amount payable.

2. If you do rent your house out, try not to spend any money on the house before you rent it out ... any money you spend before it has a tenant is basically considered part of the cost of buying the property (reduces CGT, but not an immediate tax deduction). Once you've got a tenant in then "maintenance" should be tax deductable.

3. If you do find yourself with two houses (the one you live in and one you rent out), you want to owe as little as possible on the house you live in so that more of your interest is tax deductible. Note that it's what you spend the money for each loan on that is important here ... those personal loans - are they for the work you've had done on your house? If you later rent your house the associated interest should be tax deductible.

4. Following on from #3, you don't want to spend cash on your current house ... all cash should go towards your new house. Anything you spend on the house that is going to be rented out should be borrowed (until you have no personal debt) ... get a home equity loan that you use for ANY such expenditure. Need to buy a letterbox for the house you're putting tenants in? Don't pay cash, ensure it comes out of the home equity loan (use your cash to reduce your non-deductible interest).

5. Even if you're not buying a house straight away, don't pay cash for anything for the house you've got tenants in ... put whatever cash you have in an offset account to reduce your interest. When it comes time to buy a house you can clean out that offset account for the deposit.

[does that all make sense?]

[BLKWDW]

Good advice.

I think I would go the other way.
What is more important to you, as in 'chase the big $'  or  be at home more.
Driving trucks chasing big $ you are not going to be home wherever you live.

I made the same choice 20 odd years ago, dropped $30k a year, lost a co car and some other benefits.
Looked till I found the right job that had to be only 4 days of dayshift, no more than 20 minutes from home.
It took me 7 months to find it but got my life, wife and kids back, plus a 3 day weekend.
Look at other options around you closely mate.

Where i live there is no work that pays what i need to get buy week to week. I am usually home every night just on the odd occasion i get stuck in the truck but even then i'm only 45min from home. The job pays well and is giving me a good home life but i'd like to garuantee being home every night not just seeing how the days pan out if you know what i mean.

[BLKWDW]

Another option may be to finish off your renos (god I know how much hard work that is) so that you can maximise the value of your place.  Then sell but don't rush.  Once its sold rent the smallest place you can where you want to live (a unit, townhouse or similar).  Then buy some land and build.

The only reason I suggest this is if you have already done renos then you are a deft hand at this and probably wont be happy in most established places.  You may end up spending more than you thought. The purchase of land is cheaper in stamp duties and there are no hidden surprises and you have locked into the market.

Land goes up, not houses - just the land the house is sitting on

Good luck!

i'm liking this idea the most but what would the cost of building a house be once you have the land?
There are some decent blocks in lithgow for around 85-90k. Rent for a 4 bedroom house is under 300 a week.

[HEM19X]

i'm liking this idea the most but what would the cost of building a house be once you have the land?
There are some decent blocks in lithgow for around 85-90k. Rent for a 4 bedroom house is under 300 a week.

Mate, I can understand what you want to do but having lived in both towns, I would prefer to live in Cowra.

It's a hard choice & there has been some good advise.

Good luck whatever you decide.

Regards

[shanegtr]

Heres an option I'd look at - and we did something similar to these, except we where already renting out our house.

Do what you need to do to get the house to a rentable standard, dont do more than you have to as its not tax deductable at this stage. Basically you buy another house and rent the one your currently in out. Now lenders generally dont need "cash" in the bank for a deposit. If you have some equity in your current house you can use that as part of your deposit. Essentially your equity is how much the house is currently valued at minus how much you owe on it. Have a chat to the bank manager, morgage broker etc... to see if its a worthy option for you. But what this would allow you to do is buy your new house straight up without having to worry about having to sell your current house straight away. Obviously you'll need to do some sums if you can afford the two house loans, but you could have a plan to sell the existing house  in 6months, a year or whatever .

[BLKWDW]

Heres an option I'd look at - and we did something similar to these, except we where already renting out our house.

Do what you need to do to get the house to a rentable standard, dont do more than you have to as its not tax deductable at this stage. Basically you buy another house and rent the one your currently in out. Now lenders generally dont need "cash" in the bank for a deposit. If you have some equity in your current house you can use that as part of your deposit. Essentially your equity is how much the house is currently valued at minus how much you owe on it. Have a chat to the bank manager, morgage broker etc... to see if its a worthy option for you. But what this would allow you to do is buy your new house straight up without having to worry about having to sell your current house straight away. Obviously you'll need to do some sums if you can afford the two house loans, but you could have a plan to sell the existing house  in 6months, a year or whatever .

Thanks for the advice everyone i'm taking everything into consideration. With regards to this post we dont have the equity in the house to put a deposit on another house yet. If we did i wouldnt have problems.

We have made an appointment with the bank manager for 2 weeks time and am waiting for an appointment time from the accountant. Still havnt heard back from the advisor yet so i might let that stay as is and not bother pursuing that avenue.

From what i can gather from what i have looked at and read our best option might be to sell or rent this place out but i'm leaning towards selling buying a block of land in lithgow where we want to move that way we still have our foot in the owning our own house door and renting in lithgow until we can pay our 2 personal loans of freeing up about $200-$300 a week giving us that extra to build the house we want.

[chester ver2.0]

Another option may be to stay where you are and do FIFO

You would probably earn enought that your missus would not have to work.

Do it for a fixed period
Pay someone to finish your renos (so you can spend your R&R with family) and it will actually ge done
Smash as much as you can off your home loan

After 12 months you may be in a better position to rent our your existing property and intially rent where you want to live

Bit of short term pain for long term gain

[BLKWDW]

Dont have an airport to fifo mate otherwise i already would be doing as i tried before as i have all my machinery tickets and thought it would help to get a job but nope.

[Nomad]

Hey Darren,

Jniks answers are spot on.

With regards to the buying land and building scenario I think you will get a better buy if you look at an existng residence rater than building a new home.

Dazzlers answer about land being the only thing that appreciates is right but................

Land does appreciate, and houses do depreciate, but construction costs generally rise faster than depreciation wipes off value. As an extreme example say you built a really basic concrete block rectangular home with 4 bedrooms, two bathrooms and a colorbond roof. This may cost around $800 to $900 per square metre. So lets say its 200sqm and that works out at $160K to$180K.

The same house built in the 1985 may have cost $400 per square metre to built so say $80k. Depreciation at 2.5% per annum would wipe that value back to $24k, but if you calculate that at todays rates and depreciate it it still works out at an added value of $54K.

In any event what I am saying is buy something established as it will be cheaper than building. ANd if you ok at renovating you can add value that way.

Also if you want to get serious about looking, find distressed sales. There are a number of mortgagee in possession websites popping up advertising repossessed properties for sale so if you can find a property being sold under those circumstances you may have a win financially.

Cheers Nomad.

[BLKWDW]

Well got bad news looks like i might have jumped the gun a bit in my quest to move. After going over and over our sums and going of an estimated 300k min for a house where we want to live with the repayments being around a min of 480 a week is out of our budget with our 2 personal loans. i dont know why cos i know ppl who earn similar or less with the same debt or more but seem to manage. Will wait and see what the accountant says first cos we may be doing something wrong with our budget in the first place.

Although after doing some looking around i have come up with what might be an affordable option and better or in the short term. I was looking at buying the block of land still building a good size shed which i would be doing regardless and living in it short term. That way we can sell this house use what ever profit we make to pay of as much of the loans as we can with it, because we wont be renting we are saving money there and also as the cost of the land and the shed will be less then a mortgage as well as freeing up alot of money to pay of the rest of the loans quickly and get out of that debt. We would then be able to afford to build our house and although it might cost more like nomad as suggested because of the extra income we should be to the stage of getting a house built in a short term, likely under a yr so the cost wouldnt have rissen quite as much either.

I will have to seek council approval for a temp occupancy for the shed 1st but i cant see them saying no. its not an ideal way by any means but we rnt the 1st people to do it allow us to be in a financial position alot quicker. Short term pain for long term gain so the saying goes.

Also what are peoples thoughts on kit homes? I have been looking into them and they seem like an ideal way of going for us. I realise they dont come fully finished but thats part of the appeal. i can then set bout doing my own finishings how i want it exactly which i am more then capable of doing plus once the house is livable we can then finish of other parts of the house that arnt essential to live in as money comes in. I also realise i will need to get my own council approval for building, slab laid etc but i dont mind doing the extra leg work which i think i will sorta enjoy.

Construction is another thing but i have been looking into doing cert 4 building construction which will allow me to be my own owner builder therefore doing alot of the construction myself with the help of others. Remember it doesnt need to be put up in a rush so there is no time limit on when we need to move in.

Cost is another thing as there far cheaper to buy and build and i can see getting out of it for under 100k which isnt bad but thats a rough estimate and will depend on alot of things.

Plus i will need to talk the mrs into that idea anyways which will be fun.

So what are your thoughts and sorry for the long post.

[Nomad]

There are some really good kit homes available in the market these days. As an example local to me these guys are brilliant and have some really nice homes around the place.

http://www.bushandbeach.com.au/

I have always been cautious of owner builder homes, some are good some are absolute crap, bit like me building a trailer, so the market, particularly the legal fraternity are very very cautious about allowing their clients to proceed on a purchase with them. You also have a blot on your title stating the improvements were owner built. Which in banks eyes reduces value, loan to valuation ratio's etc etc, so talk to your banker about that before you start.

Some of the sheds I have seen converted to living areas have been unreal, but be cautious going down this path. The Sunny Coast Council doesn't allow it at all in residentially zoned areas anymore, even when they did they used to the used to put a time limit on it so check that aspect carefully.

Sorry if this all sounds a bit depressing but I just want to not see you get caught up in any real estate related crap, its can be expensive, time consuming and a heart ache to fix if it goes wrong.

Cheers Nomad.

[Mrs smith]

Most councils won't let you build a shed without a house in residential areas these days, so that means having plans drawn up with the house on them first which is another cost.
Nothings easy these days.   

[Nay-DMAX]

Not sure about your area some kit homes that are closer to finished stage that we have looked at are quite expensive when you look at them.  Also if council let you live in the shed some things to think about are how old are all the Children and how long will you actually have to do it.  If the plan is to be home more is having to finish off a kit home going to put more pressure on this and less time with family which was the plan.  I wish you all the best and hope you get there soon we are in a similar position where we have looked at whether to demolish our home and build again or kit home as it doesnt seem worth it to renovate it, but we would like to have a bit more land.  Good luck