Hi there, new to this so thought’s and ideas would be much appreciated.
My partner and I have just returned from 3 years travelling & having read Steve’s books along the way we have arrived home fresh & eager to invest in property.
At the moment we are debating which method of investment would suit us best. Are we better off claiming the 1st H.B.G (which would help us out) and move in and renovate the place with the hope to sell for a capital gain before moving onto +CF properties? OR……..
Go straight for a +CF positive investment and forego the $7000 grant? This would mean a larger sum to be borrowed and possibly the need for mortgage insurance.
Thanks in advance for all your thoughts and ideas.
Luke.
Brisbane, QLDCommon misconception that you forego the FHOG if you buy an IP.
As long as you don’t occupy the IP then the FHOG is there for when you do buy your home.
Cheers,
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.
Simon,
Do you know if this is the case in NSW aswel?
Thanks
Originally posted by The investor:Simon,
Do you know if this is the case in NSW aswel?
Thanks
Is true for all states.
When it first came out then an IP meant you lost it forever but it was amended a long time ago but a lot of well meaning friends and family perpetuate the original rule [confused2]
My website has a link to each state’s FHOG website so you can read it up for yourself.
Cheers,
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.
Hi Kearnal,
We were in a very similar position not so long ago, while living in Europe.
We wanted an investment property in Oz, but didnt want to forgo the FHBG. But, we were going to be in the Uk for another year. We bought an appartment and rented it immediately on an 11 month contract. Upon arriving back in Oz the tenants soon moved out, giving me a chance to do some painting and refreshing of the place.
We then applied for the FHBG wich was granted, and have not rented the place for the last 4 months (officially it is our PPoR) while doing some very basic reno work. As soon as we have completed our 6 month stay, as per the FHBG guidelines, we can rent the property again. The rules stipulate that you must occupy the place (PPoR) for at least 6 months within the first 12 of ownership.
Would I do it again this way – probably not.
6 months of rent would almost equalled the $7000 grant. Sure, $7000 came off the loan instantly, but we have had to fork out for this place for the last 6 months, so it has handycaped our cashflow.
If I could do it agian, I would have the property as a IO loan and kept it occupied. I think the grant is good if you want to own your own home, and eat into the principal. But for investment purposes, its a lot of mucking about. Unless you want to do substancial reno work that would take 6 months in your own time.
In terms of strategy, I would prefer to buy/hold and rent IPs. This flat that we bought a year ago has already financed our second (and much nicer) apartment in Brisbane. CF+ properties in Brisbane are like hens teeth…
Every case is different tho, so if 6 months rent is only $4000 – the FHBG may be a better option..
PS: Remember that they have been known to audit FHBG applicants to make sure they are actually living there. While its still unlikely to happen, try to keep it all above board.
Where in Bris are you looking, Im in Brisbane too….
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