PPOR Advice

Hi Mark and welcome to the forum

MRW wrote:

I know these may be impossible question to answer, but I'll ask anyway

1 – How much of a set back will this be to my plans to get into IPs?
     I'm hoping not too much as my raise should cover most of the increase in mortgage?
     Financially we're doing OK anyway.

A $700k PPOR could end up being a burden in terms of your serviceability down the track. However, if it's the compromise that allows you to get into property investing……A decent broker can run a through scenerios for you, working out what you can afford based on a number of variables.

 
You have similar incomes. Unless one of you are planning on dramatically reducing your incomes anytime soon (eg. wife leaves the workforce to look after kids) then it shouldn't really matter. I'm not an accountant, so someone else might be able to advise otherwise.

I would access some of this money to use as a deposit towards your PPOR loan. Be careful with the bank lending you the full cost of the new PPOR, chances are they'll cross collaterise your old PPOR with your new one. This will cause dramas later on when you want to purchase another IP.

MRW wrote:

4 – I'm not sure how I feel about keeping our current PPoR as an IP as the yards are definitely high maintenance,
     although it's an option if the consensus points that way. It's not a house I'd pick as an IP though.
     (Considering my vast experience )

It's your call. You can always have the tenant maintain the yards – or you could supply a gardener once a month.

Financially, I only had a measly $50k in equity to get me started. Mentally, when I realised that working 9 to 5 until I was 70 just wasn't the life for me

Cheers,

Jamie

One thing to consider when choosing which name is asset protection. Who is more likely to get sued? Possibly a Nurse could be sued for a negligent mistake – Although it may be a remote possibility it is still possible. Depending on what you do it may be better to have the house in your name.

But you also must be careful about whose money goes to pay the mortgage on this house. Even though it may be in your name, if sued, it could be argued that your wife has an interest in it, especially if she was paying the mortgage, You could be her trustee in effect. Having the house in one name may not protect the other person 100%, but it would be a great deterrent and it may be unlikely the creditors would pursue it any further.

Jointly going on loans also adds risk. If something happens and you can't pay both of your credit files will look bad.

It may also work out better for long term borrowing capability to start getting loans in one name only. No sense in wasting borrowing power by jointly going on loans.

Also since you may be renting out the existing PPOR in the future i would immediately stop paying any extra off the loan. Change it to IO and pay excess cash in the offset account. This will make you future tax deductions much larger and save you heaps of tax.

Hi There,

Can someone advise me on this.

I am living in unit which i planned to make IP i owed 90000 on it only and value of this unit is 320000. So making it IP and geting max tax benefit I redraw cash on this propety and made loan value to 232000. and have put all redraw cash(142000) into off set account for the time being.

Now I like to buy one more IP and PPOR from that money. i
f I make my current house into IP will I get tax deduction on 232000.
IF NOT my next plan is to BUY future PPOR as IP For 12 month and then make that as my PPOR and current unit as IP after 12 month when i move into PPOR. can i then claim tax deduction on unit which i own 232000 after redraw.

Hope under stand what i am trying to explaine.

thaks