I have been lurking in the shadows watching the forums on this site for a few months now and have finally gathered my courage to finally ask your advice…..
Our family relocated to Qld 12 mths ago and rent out our home in Sydney. We now have to decide whether to sell our home in Sydney and clear the loan and buy multiple properties in Qld.( Our home is valued at 1.3 million with a $270 k mortgage)OR take the plunge and buy an investment property and refinance. I know we don’t have to sell in order to buy investment property BUT we also have a limited cashflow at the moment as I am only working casually ( my husband full – time) and we have growing sons to feed !
We would really like some advice on the best way to go.cmhall[sunny]
a very green bean !***
That’s a difficult question to answer. The best way forward may depend on a lot of things such as if your home in Sydney was purchased pre-captial gains = you could have a house up there as well CGT free. It would be best to sit down with your accountant. Do a few what if scenarios before hand and just go in there and get some advice.
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
Heya cmhall,
Well done for plucking up the courage to write a post…not too scary is it ?? [biggrin]
Besides the bog standard referral to “consult an independent qualified professional adviser” – how does a layman sort the wheat from the chaff with those ??…..I’d definitely hang on to the Sydney prop, regardless of the yr it was purchased. Your loan is only 21% of the value of the house. Well done.
Also, the loan payments would be around $ 19 K p.a., with say a further 7 or 8 K p.a. for C.R. / W.R. / LT / PM fees / Insurance etc…..so you’d only need $ 520 p.w. to fully cover the expenses of the prop. I’m assuming a place in Sydney worth 1.3 MM would rent for more than $ 520 p.w. ??
With your limited cashflow – ain’t we all in that boat ?? – do you really need to get into the Qld prop. market as well ?? Why not diversify into other asset classes and let you prop. holdings continue to tick along.
By the sounds of it you are well and truly along the wealth road already – alot of people have been scratching up the food chain for years and aren’t up in the dizzy heights of where you are right now.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Thanks terryw and dazzling. The predicament is that we may be up for CGT on the Sydney property – but I believe there is a timeframe ( 2years?Can someone clarify?). We have owned this home since 1999. The reason we would like to invest in Qld is that we plan to stay and would like to buy a home here as opposed to renting which we are currently doing .
Cheers
cmhall
[sunny]***
cmhall,
If the Sydney property was a ppor you can keep the CGT free status for around 5 years (don’t hold me to this, check with an accountant). So it is quite possible you will not have to pay CGT.
Regards
AlistairThanks Aperry , however, it has not been our PPOR for 15 months now and this is where my question lies…. for what period can you rent your PPOR before it is not deemed PPOR ? I know there is time frame here .
( I am SLOWLY getting used these acronyms!!!)cmhall[sunny]
***
Section 118-145 of the ITAA (1997) – you can rent your PPOR out for up to 6 years and still class it as your PPOR. But you can only claim one property as your main residence at one time (except for 6 months overlap).
Check with an accountant.
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
Thanks terryw! I will check these details when I get an accountant… which leads me to my next question…..
Can anyone refer me a good accountant on the Gold Coast? I would also be greatful for referals to mortgage brokers and even financial planners.
This may seem niave of me as I have appeared to achieved through property so far ( due to mainly good luck and a good eye) but I am now in the position where I need professional guidance .cmhall
***
I probably should not say this here, but do you think the property market in Queensland is the best to get into right now if you have cashflow issues?
Have you thought of investing in something like a Property Trust returning about 10% per annum which should cover your interest rate on any loan to fund the investment and still provide you with additional funds?
I would still be looking for a financial planner to look at various options. Sorry Dazzling.
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
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