I currently pay rent of $1629 a month in Sydney, have about $35,000 in savings and earn salary of approx $110,000. I am wanting to get into the property market but unsure whether I would be better to buy somwhere to live in (and take advantage of the first home owners scheme) or continue to rent and buy for investment either in Sydney or Brisbane. I am from Brisbane originally and it seems the property market is still much easier (read cheaper!) to get into. I have looked at a 3 bedroom house there for $345,000 with current rental return of $265. I’d really appreciate any advice on whether I would be better to continue to rent and buy for investment or buy to live in and stop renting. Thanks
My opinion is as you said continue to rent and buy for investment is probably the better option as you can keep your expenses low and start getting all these tax $ you are paying back..
I know it may be a loss of the 1st home owners grant although the lost tax $ are more..
You can pick up 4bedroom h/l packages for less than that, early $300k with rent of $270-$280pw..
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auThanks Roy. Do you have any tips of good areas to invest in with good rental returns (assume the house/land package you mention is in Brisbane) ? And/or any good resources to get this info ?
We have many options to choose from although it’s probably best to email me your details to [email protected] and we can take it from there..
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auYou will not lose your FHOG if you buy an IP and do not occupy it.
Simon Macks
Residential and Commercial Finance Broker[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Ok, if that’s the case you won’t be loosing out at all..
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auThanks. I am confused about the FHOG. I thought one of the requirements was you had to intend to occupy the property within the first 12 months. (difficult to say this if buying a property interstate). is there something i am missing about how the FHOG works ?
From what I understand, you may purchase as many investment properties as you like and it won’t affect your first home owners grant. Then when you are ready to purchase a PPOR, you may apply for your FHOG without any hassles.
Cheers,
Jacob.‘Stay Happy and you’ll be Perfectly Fine’ – Jack
Not sure about that, I think what is ment is that you can get around the FHOG as others have in the past as theclause dosen’t really indicate how long you should move into the property for. It just says you should do it within the first 12 month of owning it… Either way, it’s micro details..
Think Macro, meanwhile you are loosing alot of tax dollars..
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auWithin 12 months for a minimum of 6 months, that’s in NSW.
I don’t understand how someone may lose their FHOG if they purchase one or many investment properties, since the FHOG is designed for a PPOR.
Investors pursue different investment avenues for their particular circumstances and thus I can’t see why someone investing in residentual property would be penalised compared to say someone investing in commercial property.
Cheers,
Jacob.‘Stay Happy and you’ll be Perfectly Fine’ – Jack
Spot on Jacob.
You need to occupy the property for 6 months commencing in the first 12 months.
If something unforeseen comes up then you have grounds to ask to keep it regardless. Things like job transfers or illness have been successful in the past.
Prior to June 2000 if you owned an IP you couldn’t get the FHOG. If you owned one after this date and never occupied it then you still are entitled to the FHOG.
Any questions?
Simon Macks
Residential and Commercial Finance Broker[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Clea
I am based in Western Suburbs of Brissie. If you want to email me the suburb and estate i can give you an honest opinion of what i think of the area.
Cheers Richard
[email protected]
http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Whatever the situation with the first home grant, investing in an investment property in the right area will give you many opportunities
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hi all
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oh and Qlds007 can you email me with your one bedroom build cost per unit on your last project. I read you have just finish some 1br units.
email me if you are interested in development syndications.here to help
Oh and can someone please email me at [email protected]
Oh and can you email me anytime so we can have a little secret chit chat so I’ll pump my business figures up a bit and we can conveniently ignore the rest of the forum trying to learn about the subject.
Come on guys, this is supposed to be an open forum…or that’s my impression of Steve’s intent, not some general meat market to pick up newbies and swift them off.
What’s wrong with answering clea’s question on the open forum so everyone can learn ??
clea – checkout some recent threads in the Help Needed section, this subject has been covered pretty well in just the last few days. Adapt the logic for your personal circumstances.
hi clea
I don’t usually bite the hook but for this one I think I will.
1.dazzling I like the email and do you answer to this email address.
2.$265 p/week at a 7% gives you a $196,000.00 lend neutral with out other costs
3.At your income and the cash deposit you have I would be looking at diversifying with a high income property group and to bring the tax down a high capital growth low income property group ( if you want to stay in property)
They call this hedging most business and super funds use it.
As for your email dazzling with regard to this issue I don’t think that most people on this web site would understand hedging, put call option or diversifying to this stage, that is why I think that clea needs to know if not from somebody.
My recommendation to you clea is talk to a very cleavour accountant to organise for you. when you get to 110,000 a year you have to be very careful how you organise your investments.
I can’t nor would I give this advice to a bulliten board sorryhere to help
It is really hard to analyis a situation without going into every detail of needs, wants, concerns & fears.
I agree only broad general advise can be given in a forum..
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auThanks to everyone for their tips…am almost through reading Steve’s first book (From 0 to 130 properties) and am trying to hunt down the elusive positive cashflow property
Hi Essar,
I changed the example for your interest rate level, let’s assume a 5% interest (very hard to find but possible)
IP = $345,000
You put $$35,000 from your pocket
Loan = $310.000 for 30 years 6% interest
Rent received after commision =
$265p/w x 52weeks= $13780 – $2500 (costs) = $11280
Loan Repayments = $1,859p/m x 12months = $22308Let’s assume you are in the 47% tax bracket.
As you receive rent, you have to pay tax for it =
$11280* 0.47 = $5301.6And you have a tax deduction for your repayments=
$22308x 0.47 = $10484.76Totals = $11280+ $10484.76 – $22308- $5301.6=
-$5845Now, Brisbane prices are stank or are going up 1% or 2% that means = $345000 x 1.01 = $348450 which means $3450 profit but you are paying -$5845, so you end up paying -$2395 out of your pocket per year for your $35000. (-6.84% return/year)
In my own opinion, get a property for yourself and stop paying rent first and then buy an IP.
These are just my thoughts and they could be wrong, they are not recommendations in any way.
WBII
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