Hey All,
I am looking at buying an 18 month old apartment (2 bedroom with balcony) that is within 15 k's of the CBD melb. I really want to move out and thats why im buying it. But i just had a speil from a work colleague on depreciation.
So my question is – would I be stupid buying this apartment as an invesment whilst living in it and not making use of the deprecatiation of which i would have to rent it out and not live there which is the whole reason im buying in the first place.
I have done research on the area and find it to be a promising future boom. But if it was all gauranteed everyone would be rich!
I would greatly appreciate your advice.
Cheers
Joel
Dear Joel,
If lifestyle is more important to you than saving a dollar then I suggest you move in the new purchase and get your first home buyers grant (if applicable).
Otherwise, if you are looking at it from a purely investment point of view then I suggest you rent the property out.
Alternatively, you could do both, move into the property (get your first home buyers grant), then move out at a later date in order to recieve the benefits of the rental income and the tax depreciation schedule. That way you can have your cake and eat it too.
The cheapest and best way to obtain a tax depreciation schedule is to use tax shield:
It is a do it yourself alternative that will save you some money and can be just as effective.
Kind Regards,
Mark Leith
Property Advocate
Global Buyers Agent
http://www.buyersagent.com.auHi Joel
Sure you don't receive depreciation benefits from your PPOR but it is Capital Gains Tax free and the way Melbourne has been going lately, CGT is definitely worth considering. Good luck.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Thanks both for your comments. Good tips… If i were to move in and out at later date essentially it would be like a year or so to still get CGT benefits… decisions decisions!
Your right tho it is a lifestyle choice!
Thanks
Joel
Dear Joel,
No worries, let me know if you need help in negotiating the price.
The house I live in today was on the market for $219,000 and I was able to negotiate the price to $165,000.
Kind Regards,
Mark Leith
Property Advocate
Global Buyers Agent
http://www.buyersagent.com.auLooks like you got a good deal!
This one is asking 319k and im putting an offer in for 307. A one bedroom in same complex sold for 16 gran less than what they were asking so i know i can get away with it.
Cheers
Joel
Hi, Joel
My partner and I just bought a 2 bedroom apartment 14 kms from Melb CBD ourselves. The apartment was completed in 2005 and is under 2 yrs old. The vendor was asking $325K – 355K and we ended with $331.25K with some conditions. We are going to move into the place, stay for a while to utilise the FHBG and then move out. So, yes, depreciation, CGT and all that did come into mind. However, so is getting out of the rental market.
There will always be things to depreciate in a relatively new apartment, so I would not worry about it too much. Just enjoy the process of becoming a property owner, even if the bank owns most of it.
All the best
Daniel Lee
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