Sell rental or keep it? 2nd baby coming, unsure about finances

C

CeleryMailman1012

New Member
Hey there, my wife is pregnant and we haven’t told anyone yet.

Here’s our situation: we moved to a new town to be closer to family. Her parents are retired and are happy to look after our daughter while we both work.

  • My wife runs her own business and I'm a tradesperson.
  • Our incomes are around $85–90k.
  • We have a mortgage on our house of $460k.
  • The house is worth about $700k.
  • We’re renting it out for $500 a week.
  • Right now we’re paying $550 a week in rent ourselves.

Since we’re expecting our second child, we’re a little unsure what to do with our current house. My wife wants to sell it and buy a place where we’re living now, but I’m not sure how that would really change our situation. I think she might be a bit worried that maternity payments won’t be enough to cover our living costs.

We’re kind of in different headspaces about this, so I’m just looking for advice on what other people are doing, ways to stay positive, or any general tips.

Thanks
 
What would your repayments be for another house? At first, you might have a negative cash flow on the rental property.

Make sure you get the best rent from your rental. Ask your accountant to adjust your tax return so you receive your expected refund each pay period, not once a year. This will improve your cash flow.

Talk to a mortgage broker to learn how much you can borrow in your situation.
 
Honestly, I'd sell that $700k house and snag something right in your own town. Negative gearing just doesn't add up when you're not pulling in more than $100k yourself. And once your wife has to stay home with two little ones, your household income is going to take a serious hit. Trust me, your cash flow is going to feel that squeeze big time.
 
There’s a real sense of security in owning your own home it comes from not having to depend on someone else. I truly believe she’s right to want that, especially now, with a baby coming. Even if it puts you in the same or a little tighter spot financially, I feel it’s completely worth it.
 
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