Hi folks.
I have a substantial amount in equity in high capital growth properties which are zoned R40 with development plans drawn. Don’t wish to sell them and wanting to use equity to generate cash flow. What do people think of buying a block building a new home live in the home for a minimum of 3 months as principal resident and then selling and realising a profit to put to the next project?
[
]Welcome to the forum Deborah.
Your plan seems to rely on the capital gain that you think is ‘guaranteed’ in building the new home. I would have though that that would take up a lot of time too. Building, then living, then selling, then building etc. Do that too many times and you’ll be classed as a trader by the ATO anyway.
If you’re looking for cashflow, why don’t you look at building the place, but putting tenants in. If you can build cheap enough, this could be a CF+ place for you, plus you might get extra equity out of this deal that you could reborrow to do it again. That way you have several income streams at the same time.
Cheers
MelYou could always borrow on the land, or increase your existing loans, and use that money (for living expenses or whatever).
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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