Hi all,
We are selling up our home on sydney's northern beaches and moving to queensland's sunshine coast to be closer to family. We have $508k balance on our mortgage and our home was recently valued at around $750k.
We are hoping to start off in Qld with around $200k in our pockets. My husband is a builder and ideally we would like to buy a block of land (around $250k) and build our home (around $250k). However, we also want to begin our IP portfolio.
I guess what I'm asking is how do we make the most of our $200k? Do we put the whole $200k towards our PPoR so that we only have to borrow another (say) $300k, thus minimising our repayments or is there a better way (keeping in mind that we don't want to over-extend our monthly payments considering only my husband is a wage earner whilst I'm bringing up young family)
My husband would love to buy land, build house and sell. Then move onto the next block, build & sell (assuming a 6 month turnover per home) but how do we use this to our advantage because wouldn't the taxes kill us.
My preference is the buy and hold strategy, but there is definately a lot of immediate cash to be made in building a home from scratch and selling immediately. Or maybe we should build and sell the first 2 or 3 (giving us a bit of $$ in the bank) and then look at investing in properties to buy & hold…
Thankyou for any advice as i'm sooo confused !!
BoshieUse all your money for your PPOR if you intend living in it for the long term, then borrow for IPs.
If you decide to buy a PPOR for a short term then it doesn't really matter.
If you buy a PPOR with the aim of it becoming an IP later then use minimal amount of your own cash but keep the remainder in an offset account.
Hope this helps
Hi Simon,
Thanks for your reply…. We would be looking at living in our PPoR for approx 10 years – so is this considered short or long term?
Cheers, BoshieI would consider buying with a 20% deposit and taking an IO loan.
Save all you can in an offset account.
As you buy further investments use 100% IO loans and continue to save in the offset.
If you need to use offset cash then transfer it into the home loan and then redraw it via a new LOC.
This will ensure you have the most tax effective and future proof loan structure.
Make sure you use a broker who understands these concepts to set it up – too many don't really have a clue.
Cheers,
Hi Boshie, Simon makes good recommendations for you. Plenty of things you can do with $200K, however you need to sit down and make a plan, yes a written plan, otherwise every time you hear a HOT tip you will be tempted to follow it and lose track, set your goals and your goals will dictate what strategy to follow, etc, etc. Tonight, sit with hubby, get him a cold one, get your self a nice glass of white and make a planning session, in my experience property it is just a vehicle to help you achieve your goals/dreams.
Happy Investing
Mortgage Hunter wrote:I would consider buying with a 20% deposit and taking an IO loan.Save all you can in an offset account.
As you buy further investments use 100% IO loans and continue to save in the offset.
If you need to use offset cash then transfer it into the home loan and then redraw it via a new LOC.
This will ensure you have the most tax effective and future proof loan structure.
Make sure you use a broker who understands these concepts to set it up – too many don't really have a clue.
Cheers,
Hi, Mortgage Hunter:
"
If you need to use offset cash then transfer it into the home loan and then redraw it via a new LOC.—"What is redraw and a new LOC? Why doing it will give tax effective?
I am new but I felt it was important for me to grab the knowledge. Can you explain it a bit more?
Thanks.
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