All Topics / Help Needed! / help needed

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  • Profile photo of ajsov1ajsov1
    Participant
    @ajsov1
    Join Date: 2004
    Post Count: 14

    any help will be greatly appreciated!

    my father owns two units and is willing to sell one of them to help with my mortgage payments on a house for me and my family (Put about 100,000 towards the loan), im just wondering should he sell the unit or should we use the rent from both units to help pay? im really interested in property investment but want to own a house first.
    i know selling isnt a sin but im just wondering what everyone else thinks?

    Profile photo of foundationfoundation
    Member
    @foundation
    Join Date: 2005
    Post Count: 1,153
    Originally posted by ajsov1:

    my father owns two units and is willing to sell one of them to help with my mortgage payments on a house for me and my family.

    You’d be far better to use the money as a deposit (thus reducing up-front capital and saving a fortune in interest) than using it for mortgage payments…

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

    I am of the buy and hold school. I would prefer to keep assets and use the income to pay down the PPOR. Put all IP’s on IO and reduce the one non deductible loan first.

    But why wait until the home is paid off before IP’s? That might be years away?

    I see that holding a portfolio of property for the next boom (which is coming but I cannot give a date as my crystal ball is in for repairs atm) will see your worth increase far more than it would had you been focussed on paying down one property.

    Consider keeping the unit, maintaining your repayments on your home and looking for another property to buy…… just a thought.

    All the best,

    Simon Macks
    Interest Free Home Loan Agent
    [email protected]
    0425 228 985

    Please email me rather than using the PM service here.

    Fully Accredited With Derivex LTD and IFHL PTY LTD

    ***Ask about our Interest Free Home Loan***

    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 swampy30swampy30
    Member
    @swampy30
    Join Date: 2003
    Post Count: 85

    I think there’s too little info for anyone to be able to give an informed opinion…and only you/your father can make the choice…but for starters have you done a comparison between rent forgone versus mortgage interest saved?

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    As Swampy has said the information given thus far is a little skimpy and, on this basis, all comments should be taken with a ‘grain of salt’

    Originally posted by ajsov1:

    my father owns two units and is willing to sell one of them to help with my mortgage payments on a house for me and my family (Put about 100,000 towards the loan), im just wondering should he sell the unit or should we use the rent from both units to help pay?

    At this stage it appears as if you are only looking at the situation from your perspective. There are a number of implications on both options presented so far for your father.

    If your father sells he will/may be up for CGT and his ‘costs’ could be significant when selling fees come into the picture too. On the other hand if all the rent is directed to you to help with mortgage payments then your father will be obliged to declare income (and pay tax accordingly) on income he is effectively forgoing.

    You will also need to consider other less savoury issues that may arise from your default of payments and/or repayments to your father, the impact of this gift on your inheritance and possibly some shared ownership/caveat matters to protect the interests of your father. Along this line it is important that all worst case scenarios are explored and satisfactory solutions
    determined before embarking upon such an arrangement.

    You haven’t indicated whether or not your father is sufficiently able to stump you the deposit from borrowings and whether or not he (or you) has capacity to meet these repayments from his/your funds.

    I would also be concerned about your fathers loss of an asset and/or income if this forms part of his own retirement plans.

    im really interested in property investment but want to own a house first.

    You may qualify for FHOG if you do buy an owner occupier first (check out Simon’s website for links to the relevant authority in your home state for more information. If this is the case you could buy a home, ensure qualifying criteria are met and then move out into a rental property making the original loan tax deductible.

    Either owning a home or investment property and having equity therein is a valuable step in any further investments you want to make.

    The first steps are always the hardest and without knowing your age it is difficult to say be a little more patient or what have you wasted your money on – either way a budget may be a useful step for you and your family to make as your progress your goals a little further?

    i know selling isnt a sin but im just wondering what everyone else thinks?

    Like Simon I am a buy and hold person and would only sell as a very last resort.

    Derek
    [email protected]

    Property Investment Support Available.

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