I’d value some opinions on my current situation :
I have a PPOR with a current market value of $270,000. There is a P&I loan against this property with Westpac for $242,000 on a fixed interest rate of 6.69% until 1/3/06. Repayments $1620 per month.
I also own vacant land ( over 2 years ago paid $76,000), market value $165,000 and their is no mortage but the Westpac has security for PPOR. Currently there is an offer on the land for $155,000.
My gross annual income is $82,000, no dependants
I am not emotional about my PPOR, I’d sell it tomorrow
This situation seemed like a good idea at the time but obviously it is not tax friendly.
Which way would you go, sell one or both ? Refinance?
Regards,
CM[withstupid]
cm
Hi CM,
The real question is what are your long term plans. The answer to this will really determine what the best course of action is for you.
For example – have you considered moving out of your home and renting, thereby turningyour existing PPOR into an investment property. Provided you do not buy another PPOR this particular property will retain CGT free status for 6 years.
All costs then become deductible and you will not incur any break costs if you were to sell this property.
Depending upon which bank you are with you could consider the possibility of converting this loan to I/O (some I/O on PPOR others don’t) irrespective of what your long term plans are. This action would free up some additional cashflow and may assist with the purchase of other investments.
The block of land has provided you with increased equity and depending upon how much security was used to purchase the house you would have some equity that is suitable to assist with other purchases.
Ultimately the right action will come back to what you are trying to achieve.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958Thanks Derek,
Some real good food for thought, appreciate your replyCheers,
cmcm
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