Hi all, There is a bit of a story here & it’s a long one but I feel that I need to lay it out so that I can get the best advice possible.
I’ll put it in point form so that you don’t nod off by the 2nd paragraph.* 32 year old married with 2 dependants.
* have my own company that turns over around 110-120k per year but my wife & I only earn around “45k”, looking to expand with more private supply & install projects.
*Single income but my wife does earn a little on the side from a home based business.
* No bad debt really, just one car to pay off but in the company.
* PPOR in the Hills district of Sydney of which we have had for 9 months. See link for details https://www.propertyinvesting.com/forums/property-investing/help-needed
* purchased for 520k with the deposit taken on my parents mortgage.
* I have put about 20k into it over the last 6 or so months to get it to a decent living standard but I would say I would need another 20k or so to make it salable & around another 6 months to Finnish it off (doing it all myself after hours to save on labour costs)A big part of the story is that we had a house in Kellyville which we purchased 10 years ago for 299k & sold 2 years ago for 500k. The main reason for selling was that the company I was working for (brothers) was not paying with any regularity & the was no from of budget. Things were very tough & unfortunately the old credit rating took a beating & I thought rather than lose the lot we sold & got rid of a whole bunch of bad debts. A couple of months ago I finally decided to leave the “company” & now get paid on a weekly basis.
Anyway, I have always been interested on property investment & feel that soon I may be able to take it on.
So my question to you all is what would be my best move to attain my 1st IP? Do I sit tight & build equity in my PPOR, build a little shack the back yard & gain some extra cash (see link above), a cash positive property at the lower end of the market to boost up my creds should I see my bank to see what my options are as far as funds go, maybe a quick buy, Reno, sell.Thanks in advance
To be honest I am at a total loss but really want to get some sort of plan in place so that I can move when the time is righthint #1 don’t sell unless you have to. Look @ alternatives, Is it possible to move out of the ppor & use it as an ip? You’ll either rent elsewhere or move in with parents. Buying & selling exposes you to sales commissions, marketing & stamp duty costs.
Hint #2 convert your loan to interest only, to save a few $ on repayments
Thanks Scott, I have been with the olds for the last two years! I would be OK with hanging out but not sure if my wife would be cool with it + my parents are looking at down sizing so I suppose either way I will need to make a move.
As for renting my place out & renting elsewhere, how does it benefit me? Is it mainly come tax time that I will see the fruits of it? Does that mean that I would also be able to claim depreciation on the works that have been done?Thanks again
1 by renting elsewhere & renting your place, interest, rates, maintainence etc become tax deductions not dead money. Renting elsewhere allows you to live in a better place than yours.
You might look at renting the inlaw’s place or buying it at a discount.
Thanks again Scott, forgot to mention that our loan is on an interest only set up so that’s a start.
What you have said about renting our house & going elsewhere to rent really makes sense to me at present & has made me totally re assess the way we have approached our renovation. Just out of interest should I look at building up my taxable income for future loans?
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