Previously known as “The Property Planner, Buyer and Professor”
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Show Notes – Balancing Family Dreams & Property Investment
In this episode of the Property Trio, we explore a great listener question from James, which leads to a thoughtful discussion about life stages, timing investments, and how to balance both wisely.
James’ Question:
My fiance (27 F) and I (30 M) purchased our long term owner occupier home in south-east Melbourne suburbs of keysborough for 950k a little over a year and a half ago. With saving up for a wedding, holidays and eventually children (hopefully 2) on the horizon within 5 years – at what stage is best to consider an investment property?
We purchased our home using a 10% deposit (variable rate mortgage and offset) with approximately 820k still owing and borrowed close to our initial 900k limit.
We have a steady yearly combined pre-tax income of about 230-250k. Do we consider investing prior to children, or when we have had all the kids we want and we are back to double FT incomes?
How much of PPOR loan should be paid off prior to considering investment properties? And should the deposit for an investment be equity release from our PPOR, or through savings from our existing offset account?
It’s a timely question that gets right to the heart of balancing personal goals with long-term wealth creation.
Cate introduces the concept of “runway” — the idea that the earlier you begin investing, the more time you give your assets to grow, especially when you’ve got decades ahead in your working life.
But she also cautions against overextending yourself, financially or emotionally. The key? Stress-testing your plans before diving in.
Mike commends the couple’s financial habits, noting their disciplined approach and smart questions. Whether they invest now or wait a few years, they’re already ahead of the pack for their age group.
The trio also unpacks the best way to fund a future investment.
Should James and his partner use savings from their offset account, or look to release equity?
Dave explains that borrowing against their home, if feasible, is often more tax-effective than dipping into cash reserves. However, he also flags that they may not yet have sufficient equity to avoid Lenders Mortgage Insurance (LMI) if they go down that path.
There’s no clear-cut answer and that’s what makes this discussion so valuable.
The trio agree: if the numbers work and the couple is confident in their position, investing sooner is ideal. But if they prefer to wait until after key life events and build more equity or buffers, that’s a smart move too.
From budget weddings at the registry office to lavish winery celebrations, the Trio share candid insights and practical options for listeners weighing similar decisions.
Gold Nuggets
Cate Bakos’s gold nugget: While they are young, with one property in the portfolio, now is a great time to consider investing in a property plan.
David Johnston’s gold nugget: James and his fiancee are really good with their money! Dave encourages them to keep up that habit. Good money management habits will set them up for success.
Mike Mortlock’s gold nugget: Knowing the numbers is the key to making the decision. Without the visibility, the decision is much harder to make.
Resources:
- Ep. 36 Buying the wrong property and/or the wrong location – No. 6 of the top 7 Critical Mistakes
- Ep. 191 Risk management and the things that can go wrong when mortgage strategy is ineffective
- Ep. 250 Investment Borrowing Masterclass – Maximise Tax Deductions and Advanced Mortgage Strategies for Long-Term Wealth Creation
- Ep. 281 Mastering Accessing Equity: Loan to Value Ratio Strategy, Risks, Benefits & Hidden Opportunities that Shape Your Mortgage Strategy
- Ep. 306 How to Increase Borrowing Power – How Kids, Rate Cuts and Variable Income Impact Property Buying Potential, Equity Access & Refinance
