Insane in the Membrane

Hi Scott,

Warning: we’re completely insane.I’m married with two kids (1 and 3 years old). Work full-time ($85k plus super). Hubby works two days a week and clears $650 a week.

We’ve finally paid off our tiny 2 bedroom flat (approx $400k), which we rent out to a friend for $300 per week (mates rates). We in turn rent a 3 bedroom townhouse for $550 a week.

Here’s my question: Should we sell the unit? Keep the current scenario? Pack up the kids and live in our tiny flat? Or do we give in and buy house and land package in the outer burbs?

Kirsty

Hi Kirsty,

The only evidence that you are indeed crazy is if you actually decided to move your family of four into that ‘tiny 2-bedder’. You paid off a $400,000 investment, pat yourself on the back! If I were you I’d stay sell your investment property. Even after accounting for Capital Gains Tax (CGT), it’ll provide, to quote Donald Trump, a ‘Yuge’ deposit. On your household income you could comfortably borrow another $300,000. I’d buy an existing home, in a good suburb, that you can see yourself living in for at least ten years.

Scott