Hi all
I reckon this has been discussed before but i am hoping perhaps there has been some new way or creative thinking around this.PPOR Valued: $310000 owe 85000
IP1 Values $ 320000 owe 248000Wanting to purchase another property to become PPOR asking price $330000
Dilemma
-Sell existing PPOR no CGT but lose CG-Keep all properties then non tax deductible debt the highest
-Sell IP 1 have to pay CGT
Existing PPOR with 85000 would be +cf able to rent for $260 a week.
IP1 is neutral
Any ideas or suggestions
Cheers
StargazerLife should NOT be a journey to the grave with the intention of arriving safely in an attractive and well preserved body, but rather to skid in sideways Beer in one hand – Pizza in the other, body thoroughly used up, totally worn out, and screaming WOO HOO!”
Hi there,
Just my 20 cents, With your PPOR. Not advice just what id do cause what i want and what you want are likely to be different.Sounds Like lazy money to me.
310,000 minus 85,000 = 225,000 in equity
How much of a return is your 225,000 offering now?
1.Capital growth is not likely more likely moving down. So the equity is earning nothing.
2.If you rented it out for 260 a week your 225,000 dollars is earning less then 5%.( Better off in the bank)
3.I dont know what your mortgage repayments and on going costs are if you throw them up could pinpoint what the return would be. But I’d expect your return would be less then 4%. Pretty dismal…
( Definitely better off in the bank)
4. You dont know its worth 310k till you sell it for that.“Dilemma”
“-Sell existing PPOR no CGT but lose CG”
What Capital Gains????!!!!! or is it a property that is unaffected by the market?I guess for me i’d Sell the PPOR. And find a better avenue to increase the returns, whether it means more property, shares ETC!
Also looks the money would create more positive casflow locked up in a term deposit with no risk… Something you could do in the meantime till you find the strategy that best suits you.Id also evaluate what the equity in IP1 is returning and assess whether it needs to be sold also! Sounds like its Neg Geared ( no problem with that) But how much growth do you expect out of its equity in this market? Or does it have other appeal?
Again all depends on what you want…
-Thomas
“More Time To Snowboard”
There are a few more options. Some costlier than others.
The PPOR could be sold to a spouse or a trust. Sell it for full worth and borrow this plius purchase costs and then you have it geared 100+%. Downside is there may be stamp duty involved.
You can borrow against the IP to fund the new PPOR. Keep this loan on a split and IO. All income reduces this loan only. Slow method.
You can buy the new PPOR and borrow as much as possible then using a margin lending account gear it again and buy into an income based managed fund. Let this margin loan capitalise and use all income to kill the non deductible debt. This is a higher risk strategy as the managed fund may have poor performing years but it is faster.
Alternatively you can use the same strategy using high cashflow IPs.
Would you buy this ex PPOR at todays price as an investment? If not then maybe selling is the solution?
All the best,
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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