Looking at the breakdown of my overall NW chart in networthshare, the amount of debt ($1MM) I took on relative to my NW ($2.35MM) at the time was quite adventurous. The LVR was 42.5%, which was quite high (similar to the gearing levels I had used for my margin loan share portfolio prior to the GFC). But fortunately you can't get a 'margin call' on a property mortgage (as long as you keep making the required monthly payments). In the five years since making that purchase decision the unit construction was completed, the loan settled (so the loan was established and repayments commenced), and mortgage interest rates have climbed considerably. But at least the apartment valuation is more than I initially paid, and while I get a hefty tax deduction via negative gearing (mostly due to the depreciation schedule) the actual cashflow cost 'out-of-pocket' is relatively modest (at least for another couple of years while the loan remains in 'interest only' mode).
The unit was initially rented out for $850/wk (about $50/wk more than similar units due to my allowing the tenants to have a pet dog), and the rent wasn't increased last year when the first tenants moved out and I decided to not increase the rent in order to get new tenants as quickly as possible (they actually moved in a couple of days after the previous tenants vacated). The managing agent did the annual rent review last month, and had initially suggested that I only increase the rent by $20/wk. I pointed out that the comparison rents they had based this on were for apartments on the lower levels (with no city or harbour views), and those units probably didn't allow pets. So I requested the rent be increased by $38/wk (to a nice 'auspicious' rate of $888/wk - which was slightly ruined by the agent only citing the equivalent monthly figure on the rent notice given to the tenants). This was still a rather modest overall increase of only 4.5% over two years considering that Sydney rents have generally risen by over 6% in just the past 12 months.
Due to the outstanding loan balance saying at roughly $1MM during the past five years, while my NW has increased to $4.6MM over that period, the overall LVR for my entire 'portfolio' has now decreased to a much more conservative 21.7%.
Next year I might use some of the cash sitting in my my mortgage offset account to have a self-contained 'granny flat' extension added to my 'lake house'. Initially we would be able to use the extra space when we visit during the holidays, as my parents are planning to move into the lake house next year (so it will be quite crowded if we all visit at the same time). Eventually we could continue to use the 'granny flat' extension for weekend visits if I decide to rent out the main house when my parents eventually move to Sydney to be closer to health services. Someone with a horse was interested in renting the property last year, and it could probably rent for around $600/wk - which would cover the property expenses (rates, insurance, maintenance etc.). and would repay the cost of the granny flat extension in only a few years. I could then continue to use the rental income as another retirement income stream if we end up only visiting the lake house (granny flat) occasionally after I retire.
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