Hi everybody,
I'm new to the site and this is my first post so if you are reading this, Hi and thanks for taking the time out to read this…
My partner and I wish to buy a run down house or unit, do it up and put it back on the market.
We are not sure whether to rent it out for 12 months and then sell it in order to get more capital growth out of it, or just sell it straight away. We couldn't rent it out for more than 12 months though for financial reasons.
Any comments on whether to sell straight away or hold onto it and rent it out for 12 months would be greatly appreciated.
We are also wondering where a good area in Melbourne would be do this – basically one that would have great capital growth over the next 12 or so months.
Thanks heaps, Emmy
Close to the CBD walk to rail, bus, shops, hospital, schools, golf course, parks etc
Are you married … ask your solicitor about CGT … can you live in it while looking for another then get it revalued and use the equity to do another … do you have a good accountant or experienced property adviser.
Good luck
Thanks for your suggestion.
I do have a good accountant but he is currently away.
I am engaged (defacto). We currently rent so we could register it as our primary residence and kind of move in while also keeping our rental. But we would only want to have it as our primary residence for the minimum amount of time – I think it was 6 months? If that is not possible, then how much CGT would we be asked to pay?
Thanks,
EmmyI think if you go to all the trouble to get the property looking great through a reno then don't rent it out as tenants will never look after a place as well as a owner imho. Are you planning on utilising FHOG?
No I'm afraid we aren't eligible as we sold our house last year. Am trying to figure out what to do with the capital we made from the sale.
I want to stay where I am renting for now but can use it as my primary residence for 6 months so that I don't have to pay CGT once it is sold.
So I guess it's just a matter of finding a bargain that can be done up and then sell in 6 months? Just hope it appreciates enough to make it worthwhile.
Hi,
There is another post in one of the other forums about CGT and PPOR. In Victoria, there is no minimum amount of time specified to consider a dwelling as your PPOR. It is based on a number of things (which can be found on the ATO website) such as where mail is sent, if your belongings are there, if you connect gas, water elec, phone.
And on top of that, you can actually move out of your PPOR and rent it out, and still not have to pay any CGT if it is sold within 6 years, as long as it was once your PPOR.
I have posted a question on the other forum, as it seems too easy to avoid CGT in Vic by doing this, and surely everyone would be doing it if it was that simple?
Hope that hasn't confused things too much for you!
Bexs
I think you and your friend should buy one small home according to your needs and budget.
There is no profit in taking flat or room.
Thanks.Hi Guys,
Honestly, looking for hot spots will just confuse you and make you chase your tail.
Yes, hot spots can be found, but generally by the time they have been declared a hot spot, so many investors are snatching up property that it causes false momentum in the suburb, that cannot be sustained which causes the value of the property to remain dormant or devalues in the short term.
Instead, try specializing in a few suburbs of interest that you find is generally a stable area (i.e. very minimal drop in price when hit by GFC or a downturn, etc).
Some questions you should ask yourself and know is:
– What do buyers want in the area
– What renovation changes give you the best return, i.e. more bang for you buck
– Which changes can give the best returns in the area, i.e. structural vs cosmetic
– Which streets return better prices than other streets. i.e. too close to shops will not return a value as great as it has issues with cars parking there often. i.e around 50mitres down one street may return better value.
– What changes are occurring in the area. i.e. shopping centers, big chain companies (i.e. gyms).
– Are there any new infrastructure being built and is the council investing in maintenance of the suburb.As you can tell, knowing these things will provide you with the greatest power when purchasing a property for renovation, as they will determine the success, and not relying on a shit talker to tell you that a suburb is a hot spot.
You really need to know your shit so you can dilligently know that an individual property is a great deal or not.
Remember, that the way of making a larger profit in property is buying at the right price!
…don't take my word for anything, I am not a financial advisor!
…do some research and learn as much as you can before you make investment decisions, they can cost you years of urnings if not done right!Have a big 2010!
Cheers,
MiikeI agree with most of what Miike is saying too. The focus is not on finding a good suburb because you are not looking to leave the property at the mercy of the market to achieve natural growth as it goes along, with doing renos you are actually trying to manifacture growth yourself which can be done in most suburbs. It will all come down to how the numbers stack up for the different deals and also for the different variations within the same deal. Choose an option based on what outcome – worst case scenario profitability is going to be the most favorable to you, rather then feeling the pressure to make a judgement call.
Thanks guys,
Excellent info as always.
It makes sense that a hotspot is not so important if I am selling it 6 – 12 months later. But there is always the option of renting it out for 12 months after some basic renos and then selling it to get more captial growth? Or am I confusing things by giving myself too many options early on?
I guess when I say hotspot, I mean an area that will have steady capital growth.
Cheers,
Emmy
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