Hello Forum,
I am new to this investment arena, but I am egar to learn and understand the approach many of you have taken. May I say, congratulations, you have a great foundation for wealth creation, something that I’ve just started to unlock.
I have one question to pose to your investment gurus, I noticed a post below in regards to first home buyers grant and investment property purchase by of the members. I am somewhat in the same situation. I am looking to purchase my first investment property interstate, however this will be my first property I own individually. Our current property is in my wife’s name.
Should I a) take the $7000 grant or b) purchase it under an investment property and forgo the grant so I can gain some income (rent) from the property? When could I rent the property if I make this my residential home for arguments sake? Will I need to wait for a year ? I’m am not up to speed with the current developments relating to this issue.
I hope this doesn’t sound very simple – stupid, I have not researched this topic to the enth degree but I hope you, as forum could advise me of options I could take.
Much Appreciative,
Blake
g’day blake – i could be wrong but if you live in a house which is under your wifes name then you dont get the fhog…i think.
Hi Blake,
Yes Aussierouge is right. If your wife has already bought property in her name, then you aren’t eligible for the $7,000 grant. I’ve applied for the grant myself which is how i found out.
Jeanne
[8D]
No, I am eligible to recieve the grant as the property belonged to her father.My question is, if I do get the grant, what are the conditions before I can have tennants?
Regards,
BlakeI think you have to have lived in it for 12 months before you can rent it out to tenants.
But which decision to make, depends on your cash flow and gearing of mortgage debt.
The grant looks attractive but if you do the numbers on it you may be worse off with it. Say the interest is $15,000 for an average scenario.
a) live in year 1
well net interest in first year will be descounted by $7000 of FHOG Yipee ! But you are still $8000 down out of pocket in year 1 in interest only. also you are missing a good year in depreciation benefits assuming the property is brand new. This could amount to a tax refund of $3000 there abouts.b) rent year 1
at least two thirds of the interest will be paid for by the tenant. thus $9900 paid for by tenant means you pay only $5100 out of pocket. less depreciation refund makes it $2100 out of pocket. You then get tax benefits on rates and if its a flat, body copy fees. OK you pay a relestate agent comission but thats not much more than $1000 and fullt tax deductible also !problem here is that when you sell you have to pay CGT but well if you were only going to delay investment by one year anyway for sake of the FHOG, not much difference here.
You do the numbers and work it out for yourself.
The numbers have to work !
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