Hi all,
I am one of the un lucky ones that got really stung with the hole wizard home loans sell off and am currently with AMS mortgage which is GE money paying 7.6% on the variable and thats before that latest rise….I have tried to re finance to get out but am unable to as we brought our first home at the top of the boom 3 years ago and still dont have enough equity..
Any who, we are a family of 4 stuck in a 2 bedroom villa on one income…..My question is, if we rent out our villa and and re rent a 3 bedroom villa will our property be classed as an investment property ? as we are not buying again but will be renting again.
Also the money that we will get for our rental each week will be 200 bucks per week short of what the mortgage repayments are, is the money differance tax deductable due to negative gearing?
It may seem expensive way off moving into a larger house but are unable to get another mortgage plus my partner will start her work from home to make up the diff in mortgage repayments…..Plzzz help us….cheers Mitch.
will our property be classed as an investment property ? Are you referring to Capital gain tax exemption then read link below.
http://www.ato.gov.au/individuals/content.asp?doc=/content/36887.htm
look for six year main residence clause.Also the money that we will get for our rental each week will be 200 bucks per week short .
This depends on what the interest expense is rather than the repayment if P & I loan
Also insurance, Council Rates, Water Rates, Repairs, Property manager fees are valid expenses also.
So net rental income/ loss = rental income – interest costs – other valid expenses mentioned aboveHi Mitch
If you were to sell your property with vendor finance it would be structured so that:
1. Your mortgage payments are fully covered
2. You should end up with a few hundred dollars of positive monthly cash flow
3. You get a fixed level of capital sale for the property.With a vendor finance sale you would get positive cash flow and fixed capital gain. Renting would give you negative cash flow but, if you kept the property for the long term, your capital gain should be better.
There are always pros and cons, it's just a matter of weighing up what's best for your family's situation.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
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