Can we afford the additional property?
Q.
I am 52 years of age and my partner is 54. I have a property
valued at $300,000 with a $65,000 mortgage and my partner has a
property worth $420,000 with a $175,000 mortgage. Super balances
are $100,000 and $170,000. My property is capital tax gains free
for another five years as it is my principal place of residence. I
was thinking of buying an investment property with no deposit and
an interest only loan for $300,000, anticipating a growth of 7 - 8%
over the next seven years. My partner and I want to retire in five
to seven years. We earn similar wages totalling $130,000. We want
to keep all properties. Can I afford this additional property?
A.
If you do the sums it is likely you will find you will be able
to afford it but the big decision should be whether you buy another
property or diversify into shares. The biggest factor in this
decision should be your track record in finding undervalued
properties on which you can make a profit.
Each week financial advisor Noel Whittaker answers your
questions.
