Renting vs living in PPOR.

Hi AI,

  See link below – it points you an article that should answer the question of "PPOR or IP?"  

https://www.propertyinvesting.com/forums/general-property/4349450#comment-296958

The further question (Tax deduction re the business) I would think it would be similar to how it would work in your PPOR – i.e. a percentage of costs might be able to be claimed based on office size, personal vs business use, etc   That would require more input from someone else though.

Benny

It can be very advantageous to rent out your PPOR tax wise.

If it is in a high yielding area you may wish to live in a more desirable low yielding area so you have the benefit of living in an area you can't afford while getting good rent for your PPOR.

I'm assuming you moved in straight away after the build. If so you can rent your PPOR out for 6 years Capital Gains TAX FREE (assuming you do not have another PPOR to claim).

While it is rented out you can claim all costs (interest, rates, insurance etc). Do the sums to see if it suits your circumstances. It often does..

When you buy an Investment Property, your ability to keep saving for your next property is not reduced, however when you buy a PPoR your costs go up and your savings go down for a quite a few years.

To grow a portfolio you need to continue with your savings while your investment property's equity is growing. If you have bought well, your investment property equity will be growing a lot faster then you can possibly save. Once your portfolio gets to 4 or 5 properties, you can then turn your attention to buying a home for yourself.

My mother, who was a great property investor told me " it took me 10 years to make my 1st million dollars, but only 3 years to make the 2nd million". She bought her first investment property age 50yo and went on to buy 20 more over the next 15 years.

– See more at: https://www.propertyinvesting.com/forums/help-needed/4348869#comment-297545