This is a great forum . But i need some advise as to my current situation . I currently own a townhouse worth 330k and i owe 70 K on it . My sister is selling her house so she can relocate , it is worth 430 k with a seperate granny flat . ( father living there ) I want to buy her place so my father can stay there , i would have to live in the house to care for him . My question is can i keep both properties or am i best to sell the townhouse ( perhaps there are tax advantages in negative gearing the granny flat ? To own both and rent the townhouse would be a big ask on my current salary ……..many thanks.
Your place is worth $330k, and you owe $70k.
In normal circumstances, Banks will allow you to use 80% of the value of your property ($264k).
You still owe $70k so the USEABLE equity you have is $194k.
If you buy the sister's property, the Banks will lend you 80% ($344k) and you can put in the rest plus purchase costs. This is usually around the 5% of purchase price so you would need to come up with $107,500 approx.
So, you would have enough equity to cover the deposit and costs.
The big question is SERVICABILITY of the loans.
If you keep both properties you can rent out the current one and live in the sister's house, and rent the granny flat to your dad, and neg gear it, but there wouldn't be a lot of tax deductions on the granny flat.
You would actually be better to live in the granny flat with your dad (could be crowded and difficult) and rent out the two houses, which will have significantly more rent and tax deductions.
Or even buy the sister's house, rent out both it and the granny flat, as well as your townhouse, and rent somewhere else with your dad so you can be with him. You would get more rent for the house and the granny flat this way.
You will need to talk to a good Mortgage Broker (there are a few on this forum who will come forward for sure) to assess your borrowing capabilities etc.
It may be that you might have to sell the town house and buy the sister's house to do this.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
