Hi all,
I am thinking of buying my first property very soon however there are a few things I am trying to get my head around. Excuse me if any of the things I say/ask doesn't make any sense.
Just wondering what would be the best option when applying for a home loan.
1. Home loan for IP and rent out the property and start receiving rental income from day 1 to help pay the monthly interest on the mortgage.
2. Purchase the property and chose to live in it for 6+months(or however long it takes) and be eligible for the FHOG/FHOB to help with the down payment.
I don't intend to move into the property. This will be for investment purposes only. I want to know which option would be of better benefit. I know alot of people are rushing in to buy their properties to be able to receive the FHOB, however if the property is intended for investment purposes then why would you want to receive the FHOG? – If you had to live in the property for 6+ months to be eligible, are you not losing out on the rental income as you have to be making the monthly repayments yourself?
Also would the first option give you more borrowing power over the 2nd option as the banks take into account a certain percentage of the rental income when assessing how much you are able to borrow?
How much is the government currently offering for first home buyers before December 31st 09? – And also how much for after Dec 31st?
I would like to hear how the investors out there made their decisions before they applied for their home loan.
Hopefully I haven't confused everyone this is all new to me, so be nice
Cheers!
Hi Ediot123,
I am in the same situation as you. I am looking to buy my first propert/investment property.The way I understand it is that if you buy a property with the sole intention of it being an investment from day 1 you will forfeit your right to recieve the grant in the future. Your first even though it's not your first 'home' you will not recieve the grant when you do buy a house to live in.
So that being said I think what I will do is buy the house as PPOR live in it for 6 months do some work on it, recieve the grant and then rent it out. I give enough money to the govt each year so I think that it's only fair to take some back.
At the end of the day I don't think you will get a property that earns you $12k in 6 months like you will if you go with the grant.
Hopefully this makes sense?!?!
Cheers
sorry tuffet you are wrong on the FHOG initiative… if you have no intention of living in the house and your sole intention is to make it an investment, then you dont forfeit your option to receive the FHOG down the track. My wife and I have bough 3 IP's over the last 2 years and this year we are building our PPOR and receiving the FHOG next week…. its all about your intentions when purchasing
Ok well that is a good thing then. My bank told me that if you don't get it first time up you are ineligble and from what i read on the State revenew office site this is the way it is.
But if what you say is true then I am a happy man.
Cheers
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