Don’t think there’s much can be done.. but posting on the forum anyway. You never know.
We’ve purchased a home on the Gold Coast for $279k
Recently, we’ve been talking about moving back to Sydney once the requirement of living in the home for one year as our PPOR expires (else the govt will want their $7k back). We have a lot of friends in Sydney and miss being able to visit, etc.
We hadn’t been thinking of using our home as an investment property, but it came up as a suggestion from a friend.
We’d have to rent in Sydney in a suburb down south out of the city where we have friends. Unfortunately, the mortgage payments are $1700pm which is about $425pw. We’d be lucky to get $300pw where we are for our 3br home with a large back yard. So, as an investment property, it’s no good.
I don’t want to negatively gear as that rarely works well and will cost us tons of money in the process.
If we sold the place we also have problems:
1. Sydney prices are at least double Gold Coast prices and even if we bought a really small place (not unit or th. I cant stand living with noisy neighbours again) it’d still be about $400k.
2. If we had to sell our ppor there’d be huge fees changing over.
There doesn’t seem to be any good news in this other than staying put until we’ve paid the place off in 30 years.
Hopeful, keen and learningA few points…
You only need to reside in the property for 6 months to keep the FHOG.
Why does negative gearing rarely work? This seems to be a bit of a cover all statement whereas I have seen it work wonders for people.
You will also have some tax deductions that will make a rental property a little more affordable and a 6 yr CGT exemption that is worth a few dollars if you move.
All the best,
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.
Books I’ve read say “dont negative gear. it was once all the rage but costs money. always positive gear if you want to make money.”. Maybe I have the wrong idea as the CG would still be good. That’s why I post here as I don’t really know and it’s good to get advice. Thanks.
We’d have to rent in Sydney at probably $250pw then another $100pw or so to cover the difference between mortgage and rental income.
Hopeful, keen and learningHi
Is your loan on the property P&I or IO, this may make a huge difference to yor repayments.hi WauloK
couple of things
Talk to an accountant first he will tell you if negative gearing will work(not a book)
Talk to a broker ( a couple floating around here)they will tell you how much you can lend.
look for a property in the lower end of the market here in sydney but with potential to reasonable growth and then invest.
I can’t and wouldn’t guess to answer your post there are alot of factors that need to be looked at and I don’t konw if a bulliten board is the best place to post(, wages, tax etc).
yours is not an unusual position to be in and with a little creative accounting you will find that it not as bleak as you expect.Simon may be able to look at your figures off line and give you some ideas.
here to help
Hi Simon,
Could you explain what a 6 year CGT exemption is?
Thanks, Mei
Hi,
I’m new here, and my speciality is short term lending/borrowing not mortgages so I’d suggest you talk to Simon as well. If you’re sensible & disciplined with your $ you could look at a Revolving Line of Credit as well to cut several years off your current home loan. Also, you’re forgetting you will earn more in Sydney as well, which evens out the extra you pay in rent. You may find that you’re not in the optimum home loan facility and could be paying less.
Good Luck!
I’m not going to answer the question, however here is a link to a good booklet which does cover the issue.
Those first homeowner considering renting for the first 12 month and then moving in, there are advantages to using this 6 year exemption on PPR by moving in yourself first, and then renting out later.http://www.bantacs.com.au/booklets/Capital_Gains_Tax_Booklet.pdf
Mal
Getting out of your comfort zone, can help you become comfortable
P&I
I’m actually still on Sydney wage up here. I’m in an international company and transferred within the company so they couldn’t cut my pay.
However, I want out of this company as I’m not happy with them so I’d get another job (and probably start a hobby biz too on the side) altho I’d like to try a franchise perhaps. Have to read up on franchise forums.Thanks for the ideas everyone. If I see Simon on msn I’ll chat to him.
Hopeful, keen and learningHi WauloK
I thought you were in bris, if you are in syd then check out the post on the meeting 11 sept at gladesville email me and I’ll forward it to roy or find it gpsnetwork group its at his officeshere to help
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