Many people living in East Coast Queensland often don’t consider upgrading their property to be an achievable goal. Here are two such examples of buyers that have made the decision to upgrade their homes. Read about their strategies, goals and their journey to achieving property buying success.
Case Study 1:
- Johnathan (69 years old) & Susan (65 years old)
- Upgraded from their city apartment to a house on the Gold Coast.
MRKTS: Most retirees are looking to downsize, what was behind your decision to upgrade to a larger home?
SUSAN: Mostly, we wanted to have a dog. We downsized to an apartment comfortably for quite a few years, but we really missed having a yard that I can garden and our puppy can enjoy.
MRKTS: What was the first step?
JOHN: First, we had to sell our city unit. We did pretty well on that as we had purchased it over seven years ago, and we had over half of the mortgage paid off. It meant we had plenty of spare cash to purchase something a little larger. We purchased the unit for $535,000 and luckily it sold for $585,000. We own a couple of commercial property investments that supports our income, so getting a slightly larger home loan was no issue.
JOHN: Once the unit sold we went in search of our new home. By this stage we had already narrowed down the type and location of house we wanted. We knew the exact suburb we wanted to buy in. We also knew we were looking for a one-storey home with no stairs as Susan and I are getting older and we need something that suits our lifestyle now and in the coming years. We also knew we wanted a big, private backyard. It was pretty restrictive requirements, but we don’t plan on moving again so we wanted to make sure the house we bought was exactly what we wanted.
MRKTS: Did you get the home you wanted?
SUSAN: Our search took a little longer than planned. Luckily, the buyers of our unit allowed us to rent from them on a six-month lease, so we didn’t have to move more than once. When we found our new house, we knew it was right for us. We have purchased property in the past and knew not to get too attached to one place, so as not to overpay. Lucky for us the house we purchased was in a newly development estate all featuring one-storey homes. We had our heart set on the first house on the corner as it only had one neighbouring home, but it ended up selling for more than we budgeted. We went with our second choice, which was a little further into the development, but it fit our budget perfectly. The house features a big backyard overlooking a golf course. Its green and has plenty of room, but is still the perfect size for John and I, plus our new beautiful dog.
MRKTS: Have you had any issues managing a bigger mortgage?
JOHN: We have been living in our new home for six months now. Prior to buying we carefully budgeted a house price based on what we could easily afford. We’ve been lucky in life, with a few past property investments that have been successful. Plus, with our commercial properties currently positively geared we have no issues paying a bigger mortgage. We’re pretty low risk investors, so even if our commercial properties become negatively geared, we have savings in place as well as a large enough income stream to cover any losses.
MRKTS: What advice would you give to anyone else looking to upgrade their property?
SUSAN: Don’t overspend. The best decisions John and I have every made have been sticking to our budget.
Case Study 2:
- William (36 years old) & Emily (33 years old)
- Newly Married with their first baby on the way.
- Upgraded from their small rural house to a larger apartment in Brisbane city.
MRKTS: Usually, most new parents are looking to move from apartment to house. What was behind your decision to do the opposite?
EMILY: The biggest reason was that William received a job in the city, so we needed to move closer to the CBD. The second reason was with a new baby on the way we decided that an apartment would be much easier maintenance and much more conveniently located to shops and amenities.
MRKTS: Tell us about the new apartment? Is a larger mortgage an issue?
WILLIAM: Our old house was only one-bedroom and one-bathroom. Our new apartment is three-bedrooms and two-bathrooms. We wanted a bigger place so that our baby has a room as well as a guest room for visiting family. It’s easy distance to my new place of work and close to everything Emily might need throughout each day. The mortgage is considerably higher, but my new job is a promotion with better pay. So, an increase in repayments won’t be an issue.
MRTKS: Did you sell your house to pay for your apartment?
WILLIAM: We actually had quite a bit of equity in the house and we’re able to use that for the deposit on the apartment. We are currently renting the house. It is negatively geared, but the loss each week is very minimal and my income can support it.
MRKTS: What are your future plans for your properties?
EMILY: At the moment we are really just taking things one step at a time until our baby arrives. We have plenty of space in the apartment for the first few years, but we imagine we will want to make the move back into a house once the baby is a little older. Our hope is that by that stage we will have built back equity in our first house and have some in our apartment that we can use to make the purchase. But, at the moment we are happy where we are.