I need advice weather I should receive the grant or buy as a investment, I have did some calculation based on 6 month living it it or 6 months and have it rented out at settlement, please let me know if I calculated it wrong.
To live in it 6 months, Price is 358,000
Stamp Duty $3,530
Conveyancing $675
Body corp fees $1,350
Rates $650
Loan Repayments $13,680Home Owners Grants -$7,000
Total $12,885 in out goings.
To rent it out and buy as investment. ( rent is based on $600 a week furnished.)
Stamp Duty $11,005
Conveyancing $675
Body corp fees $1,350
Rates $650
Management fees $1,296
Loan Repayments $13,680Rental Income -$14,400
Total $14,256 in out goings.
Hi Rexilla,
The rental income seems high if it is for 6 months. For the second scenario have you taken into account possible tax deductions?
Regards
Alistair PerryNo I havent yet, do you mean tax deduction on the building? or something else?
I think rexilla may be refering to the cost of borrowing which can be claimed over a certain time period. You need to check with an accountant. Also if you pay interest on the loan, council rates and water you can reduce your total income. If the interest and costs like insurance, rates, water are greater than the rent you can reduce other income you earn – this is known as negative gearing. If you are positive geared the expenses will reduce your tax liability as they were expenses incurred to earn the rental income. If the building is new you may be able to claim building depreciation check this out with an accountant or visit http://www.ato.gov.au.
Things to consider
Could you live in the house for 6 months as well as renting rooms to friends?
It seems in Qld you have a much bigger stamp duty advantage by buying a PPOR balancing out rental income earnt in scenario 2. It really depend son your stragegy and if you can see a use for the FHBG further down the track
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