Risky, Stupid -- or Both?

Hi Scott,

Thanks for the great advice -- we read your column out loud each week! Our current situation is this: we live in Geelong, have a home loan of $7k on a property valued at $500k, and have no other debts. I am 38 years old, unemployed and looking for work; I formerly worked in the contaminated land treatment business. My wife is on maternity leave with our first child. We are looking to sell the house, rent for a year and see how things go, then buy if the market falls. Risky, stupid -- or both?

Rick

G’day Rick,

$7,000! You don’t really have a home loan, mate. Shane Warne would spend more than your entire mortgage each month on blow-waves and hand-cream. What it sounds like is that you’re justifiably stressed about having no money coming in when you have a little baby at home. And if that’s your real question, I totally understand and hear you.

Yet the answer isn’t playing ‘real estate roulette’ to try and free up some money. For one, you’ll eat up thousands of dollars in selling fees. For two, you need to look after your wife. She’s just had her first little baby and doesn’t need the stress of buying and selling and moving. The easiest answer is for you to pull up your daddy pants and get a job. Doesn’t matter what it is. Then pay off the last bit of your mortgage and save up three months of living expenses (which will be a lot less than most people’s -- because you won’t have a mortgage).

Scott