Hi Tom,

My comment was not referring to providing false information. I am talking about circumstantial change. For example, the applicant had intentions to rent out the property but later decided to move in for a while, renovate and and rent it out later or whatever the circumstances are that changed from the time she had a view of renting it out to moving in. Realistically, the lender doesn't knock on your door and say 'hi im checking to see if you are renting this property out' nor do they have any rights so say that you are not allowed to live in this and must rent it out. Again there is nothing stopping the applicant from living in the property instead of renting it out either now or later. There is also nothing from stopping the applicant from renting it it for a week and decided to then live in afterwards. 

Regards

Shahin

Hi Phoeson,

I am stating that there is nothing (lender, ATO or any other legislation) stopping you from living in the property even though you have taken out an investment loan. 

Regards

Shahin

Hi Phoeson,

If the situation is that you have an investment loan but you want to live in the property – yes you are able to do this.

Regards

Shahin

Hi PDimi,

If you are starting out on your property investment strategy I would personally not start with commercial property. Yes it has its place in an established portfolio but not when you are starting out. Start with areas that you are familiar with. South West Sydney is a great area to start. I have many investors who started out at Campbelltown and progressively moved all around Sydney (Ryde, Chatswood, etc). Speaking of Campbelltown – you can get some very good rental yields in that and the surrounding areas. Buyers agents are fantastic but since you have a limited deposit I would start speaking to local RE agents to get ideas of rental demand, buyer demographic, any future improvements to the area (such as transportation ugprades) and also start going to as many open house and auctions as you can. 

Regards

Shahin

You have a few outcomes/scenarios when it comes to CGT. In the eyes of the law if you purchase the property and rent it out and then move into it as a PPOR then this is deemed as an investment vehicle and thus CGT is payable. However, if you purchase the property and live in the property (the ATO doesn't do a house visit to see if you are living in the property but if they ask for proof you need to show bills marked to that address) for a 'reasonable' time and then you can rent it out for up to 6 years at a time. If this is done then you avoid CGT. The reason why I asked if you currently own a PPOR or rent is because you cannot claim 2 PPOR in the same period. In your case it seems that you would be claiming only one.

PS. The way that CGT works is that say you purchase a property for $700k and in 5 years time you sell it for $1Mil. The profit you have made is $300k but this is pro-rated. Meaning that the $300k is divided by the 5 years equaling to $60k and this is added onto your income tax and thus you are taxed at the higher TR. 

Why is the investment in your wife's name if (I am assuming) you are on the higher TR?

Hi Sarah,

Do you currently rent or do you have a PPOR? This is not answering your question but just checking to see if you have thought ahead about CGT?

Regards

Shahin

Hi Jer29e,

Yes the cost of building a GF is between $80k-$100k. The benefits of a GF is that you may be able to build the GF without DA. The cost of building a house is minimum $150k and could cost up to $500k depending on the finishes and the size. If its an IP I would recommend using a kit home builder such as Wincrest, etc. A custom designed house will cost you much more. There are other costs which you need to factor in such as site costs (is the land level or steep, does it have rocks, etc) and the DA and CC costs. From a finance perspective make sure that your builder is a licensed builder. 

Back to the GF – which area are you considering of building (as it may not be a good return on investment in some areas)?

Regards

Shahin

Hi PDimi,

Welcome to the Forum.

Short answer to your first question is look for an IP that has land content. Buying a 1 bedroom unit close to the city will have a higher rental yield compared to the block of land in Penrith however the block of land in Penrith will have more potential for capital growth. Not negating the importance of rental income, however capital growth is important particularly as a vehicle to fund further IP purchases. 

Units are great IP's and in fact I have 2 units in my personal portfolio but land is much better than a unit in most strategies. So why a house over a unit? You can renovate it much more extensively, extend (up, down, sideways) and develop (even if you just get the DA and CC).

The answer to your second question – I find that 9 out of 10 people do not have an issue with servicing/borrowing capacity whereas most have an issue with having enough deposit to actually purchase a place. If you are in this situation then I would recommend that you save for the deposit instead of paying the debt down.

The above is a very general statement so ultimately I would suggest sitting down with a mentor and nutting out several strategies and see how they look over a 5 – 10 year period.

Hi Team,

I actually like the website great work!

Only suggestion I would make is bringing the "Latest News and Information" higher up so that it is at the beginning of the page – saves you scrolling down each time. 

Regards

Shahin