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Hi Spanky,
Here are the requirements for the FHOG……
Eligibility requirements
FHOGS is available to people buying or building their first home and who meet the following eligibility criteria:1. Each applicant is a natural person and not a company or trust
2. At least one applicant is a permanent resident or Australian citizen
3. Each applicant must be at least 16 years of age
4. All applicants and/or their spouse/de facto have not owned a residential property, jointly, separately or with some other person, in any State or Territory of Australia before 1 July 2000
5. All applicants and/or their spouse/de facto have not owned on or after 1 July 2000 a residential property and occupied that property jointly, separately or with some other person in any State or Territory of Australia
6. Each applicant has entered into a contract for the purchase of a home or signed a contract to build a home on or after 1 July 2000. In the case of an owner-builder, laying of the foundations commenced on or after 1 July 2000
7. This is the first time an applicant and/or their spouse/de facto will receive a grant under the First Home Owner Grant Act 2000 in any State or Territory
8. At least one applicant will occupy the home as their principal place of residence for a continuous period of six months, commencing within 12 months of settlement or construction of the home.
Criteria 5 to me suggests that you can own an investment property and still be eligible for the FHOG, as long as you haven’t lived in it. This is my interpretation of the criteria, and as i’m in the same boat as you i hope i am correct as i already have an IP and plan to buy my own home next year.
Thanks for your replies westan,
Yes i think you are right, putting profits back into property is probably wise. I would have more to put towards the deposit and costs for the next reno, and be able to buy in better areas. I plan to be able to buy into the lucrative canal homes within the next 6 years, which is where big money can be made.
As for the capital gains tax, as each property i renovate will be my PPOR, it should negate that shouldn’t it? Perhaps i need to live in each property for 12 months instead of my planned 6?
I guess there is no way around stamp duty, but as i am a carpenter/designer by trade i will save myself thousands in renovation costs, so i guess the money i save there can go towards stamp duty.
I think i’m a little too green to be venturing off shore just yet[cap], but its certainly something to think about for the future.
Thanks for the comments
Hi Bizibee,
Yes you are correct, my IP, with the figures i gave isn’t quite cf+, but because it is my first IP i had to have a 20% deposit. So with the small rejuv i will give it the figures will be loan of 104K receiving $250 per week rent. It works out (minus costs) to be cf+ by a small $10 a week, not much but i have to start somewhere. I guess i case could be made that to factor in the 26K deposit over the course of the loan it would be negatively geared ($15 a week or so) but i am hoping the capital growth and rent rises will negate that cost over 10 years. I hope to not have to fork out that sort of money for each deposit, and will be implementing the “leap frogging” strategy from now on.. I, like you, am finding it hard to find “true” cash flow properties in good growth areas, negative geared (by around 30 a week) unrenovated properties with potential to add value to increase rent seem to be my best option at the moment.
I have just bought my first IP, a 1 bedroom apartment in the Brisbane CBD. Paid $130,000, currently tenanted at $230 a week. Doing a rejuv in January which should see it get $250 a week. Was valued at $140K when i bought it, so with a rejuv it will hopefully be valued in the $150K’s.
Am looking at another property at the moment and would appreciate some opinions…..
1 bedroom apartment in Brisbane CBD, fully renovated and furnished. 14th floor river and city views…$199,000. The vendor is guaranteeing $320 per week rent for 2 years, which on quick calculations with tax benefits is positively geared. I checked the contract and the current tenant is paying $280 a week rent, so the vendor is putting in $40 a week out of his pocket (to entice a sale i would guess?) for 2 years.
Is this a good investment? My concern is when the 2 years is up, will the rent have grown from 280 to 320? Current trends suggest it could, any feedback is welcome as i have the contract sitting on my desk.
I’m 26 and trying to learn as much as i can.
Hi FireCaeser,
I have just bought my first IP in the Brisbane CBD and i can tell you it is completely posible to buy an apartment for less than 140K. I purchased one for $130K with a 20% deposit which is currently renting at $230 a week. From day one it is CF+ and when the tenant moves out in January i will be giving it a facelift (flooring, paint, lighting) which should see it fetch closer to $250 a week, plus gain me some equity for my next purchase. You are on the right track looking on http://www.realestate.com.au, which is where i found mine. I hope that helps.
