Hi everyone I need desperate advice from all you property experts and gurus out there. SO here's my situation im 21years old approximately earning just under 45K PA. gross. I should receive my pre approval from St.George in the next day or two and my broker says it shall be in the range of 290-low 300s. I'm currently living at home with my parents but am looking to buy my first IP – a 2 bed unit under 15km from sydney CBD. Using the FHOG and some of my own savings as a deposit i will live in Property for 6months from settlement then move back home after. Basically will do a quick cosmetic reno -paint etc then move out and have the property rented for a minimum of 6%GRY- which isn't that bad. So the question is . . .
Should i be paying I/O from day one or is it better for me to pay some Principal while it is my PPoR?
When should i get a depreciation schedule? Should i do the reno (laminate floors, paint new kitchen , bathroom tiles etc)while it is my PPoR will that have any negative tax implications – can i still get a depreciation schedule after reno if it is still my PPoR?
Now if you where to choose between St.George(1.5% discount off SVR for 1 year) or Commonwealthbank (lowest SVR of the BIG 4's) who would you choose and why? They are both similar i think ?
Okay these are my questions so far , well at least all i can think of at the moment. THANKS FOR ALL THE ADVICE GUYS!!!
young investor01,
1. I/O or P&I is basically up to you. Most people would advise I/O, that way you have more money in your pocket or to invest in shares or another property later, but P&I does also have some advantages. I'm sure you know of each.
2. Depreciation schedule – I would get it after the reno's and keep all your receipts etc just to show the assessor and boost things up a bit.
3. Again with the banks its just a matter of doing your sums for the long run not the short next few years treatment. Also don't forget the fees of each especially Comm Bank they are a rip off for fees.
Sorry not to give direct answers but its like saying which horse is going to win the race, so many variables for each race as with your future plans and financial position etc.
This is the sort of information your mortgage broker should be providing especially if he is Licensed to provide you with investment advice.
Certainly wouldnt be taking the SGB special due to the post year rates and the associated costs.
I would be taking an IO loan from day 1 irrespective of whether the property is a PPOR or IP as you want maximum flexibility and also increase the interest savings.
Also look at linking an offset account to the loan. Remember unless your MB is a Licensed Financial Planner he cannot discuss an offset account with and the penalties for doing so are quiet high.
Richard Taylor | Australia's leading private lender
You must be logged in to reply to this topic. If you don't have an account, you can register here.
