Hi everyone and Happy New Year.
I would like some feedback.
My girlfriend has a 2 bedroom unit in Maroubra, close to the beach. She bought it about 5 years ago and has totally paid it off. She has done about $15,000 worth of upgrading and now it is a gorgeous 75sqm unit with wooden floors etc.
We are moving into our bigger 2 bedroom unit in Clovelly (on which we have a mortgage) and therefore thought of selling the Maroubra unit, as renting it would mean paying a big proportion of the rent over to tax.
She is just unsure what to do, as everyone is telling her something different. Our accountant is saying sell it and her friends are saying keep it. We are not moving into our dream home, as our Clovelly unit is a stepping stone. We will eventually rent out Clovelly (Sydney area)in about 2 years.
Any suggestions from anyone would be much appreciated.
Thank youSimon De Marchi
Accountants are not always property investors.
Isnt it all about a positive cashflow?
If this was my portfolio, I woud be renting it.Do you have any propetry that is sightly negatively geared (with good capital growth prospects?)
Are you recognised defacto in the eyes of the ATO?
There are lots of ways you can minimise the tax you would be liable for, this is what your accountant might be better at doing. I only take advice from people who have done what I want to do, or achieved what I want to achieveWhile I’m on a roll, why not take the amount of the net cashflow that the ATO will want, pay it off against/on your Clovelly mortgage and then redraw the amount (tax liability) come June 30 2005?
Tax is paid and you have reduced you non-tax effective interest billA few questions I have for you both.
The mortgage on the Clovelly property I presume was to buy it as it was an investment property?
Either way why not mortgage the maroubra property and payout the Clovelly one or do a deal like that on paper between you and her.
That will change the focus on your current debt from PPOR to IP. Then it is tax deductable interest, cots etc.
I would not sell. I have a business in Maroubra and can tell you with the new developments going on Maroubra will become another Coogee or Bondi.
PM me if you want me to explain what I suggested. If your accountant is advising to sell then I suggest you need a new accountant. Friends are good to advise but I would never act on their advice, some are driven by jealousy, others by illogical basis, some even out of kindness advise poorly as it never costs them long term.
Byronent
Adelaide SAI would do long term buy and hold there too. It might not be pretty at the moment but soon it will be the next Manly (or Bondi). As a mento once said to me “If you think it’s expensive now, just wait another 10yrs – then it will be insane!”.
Rgds.
Lucifer_au
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