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Thanks Amanda for your reply.
I see lots have read the post, but no one has replied til you.
Lisa
No I don’t have a line of credit. The negative thing about the way our loans are set up is that they are all guantees for each other. But this helps us to have a tiny loan on our PPOR (which you can’t claim) and 100% loans of the IP (therefore we can claim more interest). Doing only one house at a time has made this way work for us, and selling just over a year.
The loan type is classed as the ‘choice package’ with the national. And like I said you can chop and change all house loans under that package and it doesn’t cost extra fees (though you still have stamp duty etc). Just that once a year fee.
We also are starting to get sick of the reno work involved, and have started to build new homes. Our first one is underway right now.
The finance broker we use is a friend, so I know he’s not bias (with us anyway).
Lisa
My husband and I are renovators, we have done 5 so far. And what you do to a place will depend if you plan to keep the house or sell it soon after the reno.
I have used the bamboo type stuff to a fence at my PPOR and it’s now a year later and it doesn’t look so good. Faids with time. Looked great to start with though.
Another idea for the decking (our area has loads of termites – so a timber deck is a turn off for some buyers) There is a new product that is a fake timber. It is plastic, but it looks real. I would have sworn it was timber. I have seen it at statco among others. I have also seen at a landscape yard concrete timber planks. As in concrete that looks like timber. It’s amazing what they are making these days. However I didnt find out the costs of these, and that may out weigh the benefit.
Any courtyard areas we have done have been a few larger pavers surrounded by pebbles. A cheaper alternative. Just a word of warning if you do that, make sure you put plastic under. Cause grass growing up through the pebbles isn’t so pretty.
Lisa
Hi,
Talk to a finance broker and get them to research all the banks for you and find one that has no exit fees. Even banks with slightly higher interest rates would work out better if you aviod an exit fee.
Currently we doing the same thing as you (renovating and selling within a year). We are upto house 5. I havent once paid an exit fee. We have all our loans with the national (and I am not suggesting they are the best) but because we owe over $250K with them all our loans are under a choice package – which is $375 a year. And we can sell, buy, redraw – change our loans as much as we like and we don’t pay any more set up, exit fees. Just one $375 payment a year.
It works for us. But other people I know also have good deals too at other banks.
If you don’t have the time to research it yourself – then talk to a non-bias finance broker.
I could recommend one, but he is in Brisbane.
Lisa
Hi Dave,
I’m not a ‘professional’ on the topic, but I have learnt this from personal experience. I am upto house number 5.
Claiming depreciation on the building to get back some money on your tax return is fine if you need the money to make the deal positive geared. But you do realise that claiming the depreciation now is more of a tax deferral, than tax saver. You don’t aviod paying the tax, you just end up paying more in capital gains tax (CGT) when you sell.
Brief explanation:
An example:
If you buy a property for $100K and then sell for $110K you pay CGT on the $10K gain right.
But – if you claimed $10K in depreciation during the time you owned it, it the eyes of the ATO it is as if you brought it for $90K when you sell (as you have saved tax on that $10K already). So then you have to pay CGT on $20K. Of course there are other factors (if you own the property over a year you get a 50% discount on the CGT etc).So you need to decide when you want to get the tax average. Every year at tax time or when you sell.
Personally I have found it better to wait to I sell and save on CGT.
Lisa
