Relocating StrongMoney Headquarters

StrongMoney HQ - Front Aspect Across to Reserve

Chaos!

The last week or so has been a busy, somewhat frantic, glorious blur.

You may remember, I said previously that we may start renting at some point in the future.

Well…we decided, instead of humming and harring about it or waiting for the right time, we’ll just do it!

Since I knew it was going to be a costly exercise, it was easy to delay to sometime in the future.  But I guess we grew sick of our own procrastination.  And we deemed the downside to be relatively limited, as we can always move back to our old cosy situation.

It’s been a whirlwind of full-to-the-roof car trips with bags/possessions, organising works at our old place, and packing/unpacking.  Since we’ve only been here a couple of days, there’s still plenty of unpacking to do.  And safe to say, the StrongMoney blog has been a fair way down the priority list.

Now that some of the madness is over, I decided to carve out an article about what’s going on.

 

What’s happening to the old StrongMoney HQ?

Well…we’re not selling it.  We’re getting it a little bit spruced up to rent it out.  There’s a couple of reasons for this.

We’re not sure if we’ll like renting, so we want to be able to go back to our old house.  And also, Perth property prices have gone nowhere for ages, so we have little equity in the house (we kept borrowing from equity in our house to use towards deposits on other properties).
Therefore, we have little to gain by selling it.

After spending a couple of days furiously cleaning and tidying up the courtyard, putting some new plants in and getting some painting done…it looks great.  So nice in fact, that it almost makes us want to move back!  Haha.  Almost!

Interestingly, it’s my first time moving a whole house-load of stuff.  And it’s my partners first time renting.  She’s always been an owner.

I’ve never had much in the way of possessions.  And after this experience, I really feel like I’m very much a minimalist type of person.

Before we moved, we donated a bunch of clothes and dvds.  We also recycled some old electronics and cables that were clogging up some drawers.  We even got to throw a few things away, which I was overjoyed about 😉

After moving, it still feels like we have way too much stuff for my liking.  But it’s not all about me, and household peace is more important than my urge to have less stuff!

 

Why did we move?

Here’s a few reasons why we decided to relocate StrongMoney HQ…

  • We wanted more space.  Plenty of space for gardening was a priority, as Mrs StrongMoney is now a genuine gardening fanatic.  A courtyard with some garden beds wasn’t really cutting it anymore.  After filling the garden beds, she also had well over 70 pots!
    Now there’s much more space for extra fruit and veggie crops.

 

  • More nature.  Our new place overlooks a massive reserve with a lake.  Already we’re enjoying lots of bird life, and have also seen turtles.  There was even a little green frog in our kitchen today, how awesome is that!

 

  • Peace and quiet.  Although we like our old place, it’s becoming a pretty busy area.  And our main shopping district was becoming pretty hectic, traffic-wise.  Our new local shopping centre is relatively small, but has what we need.  So far, we’ve only been once but it was quiet at the time.  Being further away from the city, it’s naturally less populated, which is nice.  Since it’s so peaceful here, it’s great for thinking.  This makes for a good writing/blogging space.  I’m turning into quite the reclusive-old-man type!  I just want peace and quiet to think and do my own thing.  Geez, imagine what I’ll be like when I’m actually old 😉

Despite sounding like the middle of nowhere, we’re actually only 25km from Perth City.  And only 10 minutes from the largest shopping centre in all of Perth.

Here’s our lovely new outlook…

 

StrongMoney HQ - Front Gate to Reserve

Front gate out to the reserve

 

StrongMoney HQ - Lake Aspect at Reserve

Lake/wetland area of the reserve

 

StrongMoney HQ - Extended Front Yard!

Long-view aspect of the reserve – our dog’s new playground

 

 

But why rent?

Since we’re already homeowners, many would say we’re going backwards by renting.

I don’t think in terms of “rent money is dead money”.  To be honest, I think that’s a rubbish statement in isolation.  It pays to look at the total financial picture, before deciding which is better – renting or buying.

Because this is an experiment, it doesn’t make sense to buy.  Maybe we’ll try a few locations, before we decide where to settle more permanently.  Renting is just another version of try-before-you-buy.  And with hundreds of thousands of dollars on the line, plus massive transaction costs, it’s not a decision to take lightly.

Besides, most of our savings are tied up in other investments.  And no bank would want to talk to us anyway, since we’re not working.  Sure we have some investments, but also plenty of debt and no job income.

It’s a messy picture, and most financial institutions would likely smile politely and proceed to decline any requests we made.  We’re in the classic Equity Rich, Cashflow Poor situation.

But later on…

Things will be quite different.  A few things are happening simultaneously here.

In 5-10 years time we will own much less property, meaning lower debt and drastically-reduced expenses.  We will also have much more shares, meaning much higher dividend income.  There may even be some part-time work or hobby income as well.

Basically, the cashflow situation will be reversed.  All our investment equity/savings will be easily accessible.  We could probably even qualify for a new mortgage if we choose.

Around this time, we’ll have decided how we want to live, and where to set up StrongMoney headquarters more permanently.  We’re giving ourselves a lengthy period of experimental-renting, that should time nicely with having converted our equity into a juicy dividend income stream.

Later on, I’d prefer to be an owner because I really want to have a large solar power setup, with battery storage.  And I may even treat myself to an unnecessary new car…an electric one of course!
Our current car is 17 years old, so hopefully it makes it to 2025 😉

 

How do the numbers stack up?

A side bonus of moving further away from Perth City, is that housing is generally better value.

This 800sqm reserve-facing 4 bedroom house, is only $400 per week to rent.
In total, it’s about $21,000 for the year.
Our other living expenses are approximately $19,000.

So, our annual spending is now around $40,000.

That’s my rough guesstimate anyway.  I’ve said before how I don’t meticulously track everything on a spreadsheet.  But instead, I keep a running estimate with pen and paper, of our bills as they grow or shrink over time.

Out of interest, I’ll be auditing myself at the start of next year, to get a clear picture of how our spending differs from my estimate.  Maybe it’ll be way off!  Who knows?  We’ll have to wait and see…

Anyway, this level of spending can be covered by around 700k worth of good-quality, dividend-focused Aussie LICs.  So although we consider it a great life, it’s not exactly expensive to maintain 🙂

 

Experience so far

So far, we love the location.  With the lake/reserve effectively an extension of our front-yard, it’s really tranquil.  And since the local shops aren’t far away (15 min walk), it feels as though we’re still close enough to enjoy the convenience, without as much traffic and other hassles of urban living.

Our dog seems to enjoy it now, after a panicky first night.  Yesterday, I noticed how nice it is to walk around the yard at the end of the day with a drink and look at the trees.

 

Final thoughts

There’s been quite a bit of interest in our old place so far, which is nice.  The rental market in Perth is quite tough, so a short vacancy would be great.  Fingers crossed!

We’re looking forward to settling in, unpacking properly, and setting up a new veggie patch.  There’s still a fair bit to do, but that’s ok.  It’s sometimes nice to have a boost of frantic productivity, among an otherwise cruisy early retirement.

Speaking of which, I think I’ve earned myself a beer!

Those boxes can wait…

 

 

14 comments

  1. Was wondering where you were as haven’t seen much of you on PC forum.

    Thornhill would be proud. Ideally he would prefer to own no home and rent but unlike other countries there’s no long term leases (eg 10 years) in Australia to guarantee security of tenure. Otherwise he would be entirely invested in Shares. So he settles for the next best thing in owning a unit and borrowing against it to buy shares.

    First move, toughen up younger fella we’ve done 19 complete moves in our lifetime including a few times overseas:-).

    Hope your new place works out well. Do you have the owners permission to introduce vege gardens and fruit trees?

    1. Yeah been a bit busy. Sometimes I don’t comment on there since I have little to add. The other folks(like yourself) make much savvier and thought-provoking conversation!

      That’s likely our long term plan, eventually own a place and mortgage it for shares. All the benefits of owning, without all that lazy capital tied up.

      Haha shit! You guys are nuts, that’s once every couple of years! I bet you’re hoping to never move again??

      Thanks mate. Yep, vege garden will be fine as there’s lots of empty garden beds already. And the fruit trees are staying in very large pots, since we’re not here permanently. The house has a couple of established fruit trees of it’s own 🙂

  2. i d love to follow the experience thru since i m asking myself the same question. we own a uni 2 bed with 2 kids and thinkin of renting with more space until we can move back to our unit when they re gone…

    1. It’s an interesting toss-up, that’s for sure. I think there is little to lose, since if we don’t like it we can always move back. So far we like it (aside from the upheaval), but we’ll see how things go over the years 🙂

      Will be sure to provide an update later on!

  3. What is the potential impact on your old ppor’s CGT exempt status when you sell it? I’m assuming you’ll be negatively gearing it.

    1. If we rent it out for longer than 6 years straight, we lose the CGT exemption.
      See here for the rules regarding that: https://www.ato.gov.au/General/Capital-gains-tax/Your-home-and-other-real-estate/Your-main-residence/Treating-a-dwelling-as-your-main-residence-after-you-move-out/

      We may move back in at some stage, and the 6 year rule would start again. We could then move back out and rent the home for a further 6 years. If we sell before the 6 years is up, we still receive the exemption. That’s my understanding anyway…

  4. Some great reasons to move. I also like the idea of try before you buy in a few locations before settling on a forever or a ‘for now’ home. The pictures look great too.

    Just a side note – your 800sqm house is cheaper to rent per week than my 2 bedroom apartment in 35km from Sydney city…I don’t know the sqm but it is way smaller than yours. Big differences and another huge reason I won’t buy here yet

    1. Thanks Miss B.

      Wow, that’s a huge difference. And even such a large distance from the city!

      That’s probably a good call currently. Cash can be put to better use if there’s no overwhelming urge to own a property 🙂

  5. This article covers something I’ve been beginning to think about, perfect timing. Thanks for conveniently moving! There are some factors making our suburb quite unpleasant, but I don’t want to sell and move. I’d rather try a new neighbourhood out first.

    However, we’re both like Ms SMA, and have never rented, so I’m not sure what to expect. Also, no rental history, and cats. Not sure how easy it would be for us to even get in! How long did it take for you to choose the property? The location looks amazing. Can I ask how long your initial lease is for?

    1. Ahh you’re owners too, it can end up being procrastination overload! Smart move wanting to rent first. I cannot wrap my head around people wanting to spend 25-50k stamp duty, agent fees etc to move house and avoid paying that dead money (rent). And the new place is often unknown – expensive gamble.

      We weren’t sure we’d get approved either, due to not working, lack of history and dog – just bank balance and assets to go on. But rental market is weak here which helped. Cats should be fine. Dogs are higher risk, higher wear n tear, from the owners perspective. You can just keep applying I suppose, until you get something. We looked on and off for a couple months, decided what we wanted most (close to lake), then one came up pretty quickly after. Lease is for 12 months. We really like it, super peaceful with lots of open space!

Leave a Reply

Your email address will not be published. Required fields are marked *