Hi!!
I would appreciate if you can give me your opinion as I have a dilemma…1)Buy a property in Sydney negative cashflow (-70 pw) but getting the First Home Own Grant.
Not paying stamp duty plus the 7000 will allow me to buy a more expensive property.OR
2)Try to find a positive cashflow property and not getting the FHOG. Despite the only CF+ that I have found so far are in Mount Isa
Thanks for your help!!!
Flip a coin!
One you will make money on and one you won’t. A more expensive property does not make it a good investment. You can always get the FHOG later anyway. The choice is clear to me!
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdI personally would buy the one with more prospect for CG. $70 pw out wouldn’t break my bank and I don’t believe Mt Isa will show a healthy growth in the medium term.
I would rather see $50K growth than $20 pw cashflow – but that’s just me [suave3]
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Todays Hot Rate
***3 year fixed – 6.49%***Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks Robert for your comments!!!
How can I get the FHOG after I have bought an investment property??
You can buy as many properties as you like. As long as you don’t LIVE in it, then you are still eligible for the FHOG.
Go to http://www.mortgagepackaging.com.au/index_files/first_home_owners.htm and then click on your State to read more about the benefits in that State.
The most important words about this are:
“All applicants and/or their spouse/de facto have not owned on or after 1 July 2000 a residential property and occupied that property jointly, separately or with some other person in any State or Territory of Australia”
It is a different story if you bought BEFORE 1 July 2000 though.
Just remember, capital gains and or rental returns are not certainties. It will all come down to what you need but I suggest the positive cashflow properties first because it will help you make the repayments on your owner occupied home because you will have to live in it for 6 months to be eligible for the grant. That is at least 6 months without any rental income. Also, positive cashflow will help you reduce your current renting expense.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdCashflow is King,Queen, and the rest of the deck if your effort income is finite as most are. Get a good neutral/psotive investment now and with its equity in a year or so repeat ad nauseum until all the incidental cost and rates on each property get you to the same $70.00 a week negative. See how much better off you will be then as all of the costs are a tax deduction and will add to your abaility to handle the costs ongoing. Then as rents increase you become less and less negative and finally these properties then pay for 100% of their own costs. Once you have achieved break even holding several properties you have so many more options you wont know yourself.
Several small investments in different areas are a damn sight less risky than one big one. Different locations maximise growth potential and smaller loans mean vacancies affect you less.
Rent in sydney is cheaper than the mortgages there now so rent where you choose to live and then invest where the growth is.
Good Luck and happy hunting
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Hi Faccina,
(1) How would you be eligible for the FHOG if it is an IP? Would you move into in for a while?
(2) I wouldn’t be jumping into ANY property JUST BECAUSE it may be positive cashflow these days…
(3) Can you afford the extra repayments of the $70pw longterm without sacrificing too much? Just remember that Capital Growth may be 5 – 10 years away!!!
Personally, I wouldn’t be jumping for either option, but instead I’d look for a property that has a ‘PROBLEM’ with it. Then I’d find a ‘SOLUTION’ for that ‘PROBLEM’. This should make you money!!!!! [biggrin] i.e. subdivide, change rooms, etc….
You could possibly set up a trust structure so that later on you can still buy property in your own name and be eligible for the FHOG.
DON’T RUSH IN – Sounds like you are not sure and a bit of education now may save you lots of headaches and MONEY later on.
Good luck,
Del
Thank you so much for your comments!!
Del,
Being “eligible” does not mean you have to take it. I just meant that you could buy a heap of investment properties and then buy one to live in and still be able to get the FHOG for THAT purchase.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdHi Faccina
My name’s John.I’ve been investing for 6 years now and have managed to stop working as a result but I still feel unqualified to give advice.
However…Option 1 sounds like it won’t produce anything for many years.
Re option 2 …I haven’t looked for a while but last time I did CF+ properteries existed in Carnarvon WA also in NZ in Tokoroa, Greymouth, Te kuiti, Castlecliff which is a beach suburb of Whanganui.I would also look in the SW corner of WA around Augusta across to Esperance. I think there may be capital gains potential around Augusta WA.
Personally I wouldn’t even consider your option 1.
NZ doesn’t have stamp duty or capital gains tax.Thats why Bob Carr is investing so heavily there.
Regards
John Bondwell, I suggest you go the the positive cash flow one. (as always)
Learn to how to generate perpetual cash flows within 3 years, or just add a cash flow stream to your income: http://healthyjack.usana.com
You must be logged in to reply to this topic. If you don't have an account, you can register here.
