Good evening all. I’ve only recently joined this forum and I’m finding it a wealth of information so far. I’m about to take the first steps towards buying my first investment property. I’m considering renovating an appropriate property in an effort to make an initial capital gain before either re-selling or renting out and holding. I’ve thrown a few figures around (see below) but I’m having trouble making it look like a viable undertaking.
I have renovated an 1880’s house previously. I made a nice capital gain I but I spent way more than I needed to and made a lot of mistakes along the way which I learned a lot from.
Considering my below figures I would have to increase the property value through my renovations from $350k to $440k to make 10-15% profit on original market value. If I decide to sell rather than hold I’m then up for real-estate fees and capital gains tax ?I’m intending to use the equity in my existing home to secure finance however I can’t see a bank lending me $398k on a property currently valued at $350k, is there some way around this ?
I’m Interested in hearing other people’s thoughts on this, particularly the tax implications (I work for a regular salary of about $120k pa, pay about $30k income tax).Matt
Purchasing cost $350k
Reno Budget $30k
Stamp Duty $11.5k
Legals $1k ??
Holding @ 3 months $5.4k
Total $398K
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