Who would you be getting a loan through to buy the house? We have just bought our house only 8kms from Brisbance CBD for a more than what you are going to pay and we only pay $1200 a fortnight.
Anyway if you were looking at any old house there would be many good and bad reasons for either side buy or rent. But being offered a house in paddington for that amount I would try and find a way to buy it. Sounds like a great opp. If it's worth more than that and if you can add value to it then it could be a good way to go. That's if you can afford the extra's that go with it. Also I believe that the money you can make on selling a house is going to be far more than you can save when renting...but that's me as if the money is there it just goes, but when paying the house off that money is taken out first so we don't over spend (it is our savings in a way). Also if you are settled there and had planned to be there for a bit then if you can make it work I would buy it......you may pay some money off and then find you can rent it and use the house to get another loan to buy your bigger house once you are more established. Again not possible if you just rent.
I'm not sure about the buy and rent option, you still have to cover things such as rates and there are also the repayments so depending on how much rent you can get, plus what rent you are paying you may not be any better off than if you buy it. Either way I wouldn't let the opportunity go, sounds like a great one. Unless the property is falling down and going to cost you $$$$$ all the time.
$1700 f/n in mortgage sounds really high for that amount? I would think closer to $1200- anyway it is a large amount of money BUT if you think you can swing it I would go for it, probably good to factor in any mortgage rate increases anyway. Property is really hard to get into - I know in Melbourne for first home owners it really is getting nearly impossible so if you have a chance to invest in something, particularly that sounds like is going to make you money then go for it. If you have to sell it in a year then so be it but in the meantime you will be paying off your own home instead of someone else's.
Keep in mind if you rent it out you still have to pay things like the different between rent and mortgage which sounds like it might be significant (I doubt you would get $600 p/w rent but might be wrong as I don't know Brisbane?) also insurance, rates, water, and ongoing maintenance to the property. There is also the stress of finding the right tenants. Lots to weigh up - might be worth talking to someone about your finances and working it all out! All exciting though and I think go for it!!! xoxo
If you're ever going to buy something this is the year as property prices are really low. Besides it sounds like she is doing you guys a huge favour to help you get ahead
Can you make an appt to speak to a mortgage broker/your bank? TBH it seems like a great deal but I guess it really depends on if you can afford it and are happy to bear the brunt of the responsibility of being a home owner/landlord.
If you don't have a deposit then the stamp duty is about $16K so your total loan $456K. If you pay principal and interest it will be about $1450p/fnt whereas interest only will be $1200. I am not sure given the current economy how the banks are going with 100% loans but you should certainly start to enquire as to whether it is doable.
Don't forget to factor rates/water supply, insurances and agents fees into your budget if you are planning on renting it out.
I am completely biased as DH bought a property at 25 and it has honestly set us up really well, we live in a great area with access to excellent schools and close to the city and the beach. We have been a bit younger than everyone else but once the kids started kinder that age gap has disappeared (and cos we're older)! Maybe try to think ahead as to where you see the most opportunity for your family long term.
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