Hi, just need some advice and direction. We currently live in a townhouse which we bought way back in 2001, it has gotten too small for us and we are looking at upgrading. We want to get into the property market and always thought that our current place would make a great investment propoerty (close a uni, shops and freeway access). If we were to refinance and rent it out, it would possibly be in a postive gearing situation as we don't owe too much on the property. We could then either rent a large place short term or possibly look at buying another investment property or place to live. Our accountant suggested that it may not be the best thing to do to rent out our current propoerty. As you want your investment propoerty to be high gearing and main residence to be low gearing. Since we don't owe a lot on it, we won't get the maximum tax advantage from a negative gearing perspective. Some have suggested to sell, buy another propoerty to live (so we don't have a massive mortgage) and then look at buying an investment later which will allow for high gearing situation. Any thoughts would be appreciated, sell or rent?
Hi and welcome to the forum.
You say We so i assume that the property is Jointly owned.
Have you considered one party purchasing the property from the other increasing the borrowing accordingly and then renting the property out. This will increase your Tax deductible interest and give you surplus funds to use as deposit for the next PPOR.
Stamp duty maybe payable depending on which State you are located in but depending on the numbers could be well worth it.
it is a strategy we use regularly for clients and works very well.
Richard Taylor | Australia's leading private lender
You must be logged in to reply to this topic. If you don't have an account, you can register here.
