All Topics / Finance / House repayment question

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  • Profile photo of MangoeaterMangoeater
    Member
    @mangoeater
    Join Date: 2003
    Post Count: 7

    HI, I bough a house for $130k and am letting a couple of rooms. My repayments are $153/w and I expect to get $180 rent when I rent it next year. I bought it before reading steaves book hence the negative cash flow. It is a 30 year old place and is my first house. Should I pay more into the house then the minumum or should I hold and hope for a capital gain or sell. Maybe I can wrap it. What would you experts sugest? Thanks

    Profile photo of melbearmelbear
    Member
    @melbear
    Join Date: 2003
    Post Count: 2,429

    Just because you have read Steve’s book, and seen the way he invests, doesn’t mean that you have to automatically copy it.

    If you can rent it for $180, and your repayments are $153, I would think that it might come very close to paying for itself (inc all other costs). If this is the case, what is the problem?

    Are you moving into a rental, or will you be buying another house to live in? If you are moving into a rental, or indeed another place that will not be your PPOR, then you should be able to claim this as your PPOR for the next 6 years, and be CGT exempt if you were to sell it.

    Cheers
    Mel

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    I agree with Mel. It sounds like it is paying for itself. How much has it gone up in value since you purchased it? And more importantly how much do you think it will go up in the future?

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of MangoeaterMangoeater
    Member
    @mangoeater
    Join Date: 2003
    Post Count: 7

    Thanks for your reasurence. I only need to live in it for a year for my first home buyers grant and then will rent it as an investment. I will have free accomadaion then elswere. I think it has gone up a bit but I’m conserned about the age of it. I’ll nead a new roof soon rah rah but yes I’ll hold it for a while. I’ll just have to miss out on the CGT saveings so I can rent it or find a way around it when I sell. I heard that in america if you buy another house that is more expencive strait after you don’t pay CGT. Could it be simular here

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781

    Check the legislation and you will find that you don’t need to live there for a year to get the FHOG. I think 6 months will sufffice but check for yourself!

    As it is your home you will not pay CGT if you sell while you are living there or up to 6 years after you rent it out.

    Cheers,

    Simon Macks
    Mortgage Broker
    [email protected]
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of MangoeaterMangoeater
    Member
    @mangoeater
    Join Date: 2003
    Post Count: 7

    Thanks. I will check about the 6 month thing. Do you meen that if I rent it I wount pay cgt if I sell within 6 years Or do I have to say that I’m liveing in it when I sell; as long as it is less then 6 years? cheers

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781

    The first.

    Simon Macks
    Mortgage Broker
    [email protected]
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

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