I have a mortgage of 250k and a small family. Our house is worth 380k and I earn an average wage. We are not confortable paying over 45% of our income on the minimum mortgafge payments. We have a plan…
Sell. Make around 130k.
Buy a few IPs. Each under 150k.
20 – 30% deposits.
Houses should positive gear as they will be bought for the long term. We would love to build a portfolio.We would then rent in our area as rent is cheap, buying is not(NSW Central Coast).
This would reduce our weekly outgoing expenses.
People say we should rent our existing house out but we only want positive gearing IPs.
Does this sound alright?
[?]If you are going to sell, have you considered moving into one of your future IPs for a short time and claiming that as your PPOR. you will be exempt from CGT for up to 6 years.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Can you get a valuation on your home and turn it into a line of credit?
Would save a lost of hassle in selling and moving, your income is contributing to loan repayments(not rentals), you save on selling/buying fees and I am sure you are living comfortably.
I’ve thought of doing it but too much hassle, with parents and son and husband and business involved.
Our home has had so much work done on it, including set up for home business etc.
We use it as a line of credit, so it has not been a “liability” but an assett.Hi all I am also looking into going into investment properties, just cant seem to get my head around all the financial side of it…but will keep reading..
My broker suggested the line of credit on my house can u explain to me what this means…I would be very appreciative…Hi Nu Gen,
Can I ask which area you are thinking of renting in? Also how cheap the area is?
P & T
are you sure you are going to come out with 130k?
have you considered CGT?
I agree with Michael re renting.
Michael, Yes my servicability is stretched. Will me paying rent elsewhere effect my servicability if the banks don’t know I am paying rent. Maybe they think I am staying with mum etc.
Regina, Not too sure about a line of credit. I cant see it helping my serviceability. I could be totally wrong.
Daretotry, I am looking at Copacabana to rent. Houses worth 500k are renting for less than $300/week. Beautiful area.
Crashy, Do I pay CGT if it it was not an IP? Not sure.
Thanks for your suggestions. I think I will cash in and start fresh with a csmall chunk of money. Will definately keep reading posts for more tips.
Nu Gen
Michael, Yes my servicability is stretched. Will me paying rent elsewhere effect my servicability if the banks don’t know I am paying rent. Maybe they think I am staying with mum etc.
Regina, Not too sure about a line of credit. I cant see it helping my serviceability. I could be totally wrong.
Daretotry, I am looking at Copacabana to rent. Houses worth 500k are renting for less than $300/week. Beautiful area.
Crashy, Do I pay CGT if it it was not an IP? Not sure.
Thanks for your suggestions. I think I will cash in and start fresh with a csmall chunk of money. Will definately keep reading posts for more tips.
Nu Gen[
]Oooops…heee heee heee heee[
]nu gen,
You should not be up for CGT if you are selling your PPOR. This is exempt.
Good luck,
Del
Nu Gen, you are just trying to get triple posts to catch up to Westan …[
]Swaney the theory of a line of credit is something like this:
House value – $300,000
Amount owing – $180,000
LVR at 80% – 240,000If it’s an income lend, then providing you can service a $240,000 loan you could refinance with $180,000 basic variable P&I (cheapest rates around 5.9%) and $60,000 as a line of credit (at slightly higher rates about 6.5%) and when you find investments that suit your strategy (high +ve cash flow, fix & flick etc) then you can draw out the extra $60,000 out of basic a gigantic credit card, and only then do you start paying interest on this extra amount.
Make sense?
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MelThanks Wilandel and Melanie. Melanie, I didn’t know replying to a post added to your tally[
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Mr Moderator, rack another one up for me![]
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