Hello all
I’m a 27yr old from Melb, living/working overseas. Married, no kids, no properties either.My wife and I have saved about $200k, and are now thinking of putting that towards our first IP. This IP is a 4bd home ($350k+)within a 20km radius of the CBD, which we may want to live in some day, but would be rented out whilst we are still overseas.
We plan to stay overseas for another 5 years or so, then move back, with most of the house payed off if possible.
As far as smart investing goes, how does this plan rate? Any advice would be greatly appreciated![blink]
Thanks
hi Kwaidan
This is a very similar post to another post is it the same person or is there a group that is flying out on the one flight and where are you flying to??????here to help
Not the same person, though, I read the other ‘fence’ post and felt it was somewhat similar to my own situation.
I have been O/S for 6 years now. I’m in Japan.
Hi Kwaidan,
not sure if you’re earning any income in Aust (ie: lodging an Aust ITR?).
2 options – throw down all deposit to minimise mortgage and respective repays – look at i.o vs P&I, depends upon your strategy. Being non-res, the IP really wont provide too much benefit to your o/s income. Not sure about Japan and their tax laws, but if your rental income is being paid into an Aust. bank account, whether they consider o/s income in their itr (or their equiv)
second option, borrow to the hilt (80% or even 95% with LMI), throw all your cash into an offset. End of the day, more expensive option, int accrued will be similar to option 1, but reserves the option to treat as an IP when you eventually return, you can simply withdraw the cash if you chose to buy another PPOR and keep this one, thus loading up your IP and reducing your PPOR debt. Otherwise, simply dump your offset money into the loan upon your return if you choose to occupy.
I know you said you would possibly move into it, but 5 years is a long time and it’s something maybe to consider as a lot can change in just 3 years!
It really is a question for an accountant, having it P&I and repaid to live in upon return is a nice welcome home present, but your accountnat will advise whether it will be to the detriment of your income tax return. The fact you have saved $200k in a bank account alone suggests you earn too much money and should share it with the rest of us [biggrin]
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Thanks for your advice Rob,
I will have a chat with an accountant about this.As for earning too much money, I wish! Just living frugally at the moment. Japan has a relatively low tax rate that helps too. [blush2]
Why not invest in Japan RE? I’ve herd you can find +CF deals quite easier there than in Aust.
Hellman
I suggest you consider buying an IP with a 20% deposit only. Put your remaining funds into offset account and save in there.
This will allow you to use these funds on your return for a home etc without giving you tax problems.
If this doesn’t make sense please drop me an email. It can be a little more tricky when the borrower is OS.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[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.
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