Hi Everyone,
Please excuse my ignorance as I am new to property investing and to online forums!
Firstly, current status. My husband and I have one IP (slightly neg geared) and we owe 75% of our current home.
We want to buy another property (larger home) that we want initially as an IP and then eventually want to move into it and make it our residence in about 12-24 months time. Then our current residence we want to turn into a IP.
First question: can we borrow more $ from our current home to pay a deposit for the next new property? is that allowed?
Second question: Is there problems tax-wise if we buy a IP, knowing that we want to eventually live in it later? All properties are in NSW, Australia.
Third question: Is this the best course of action, or should we just sell our current property to buy a new home? as we don't like to idea of selling!
Thank you so very much for your advice.
Hi audio
Welcome to the forum.
Yes, what you're wanting to achieve is possbile.
However, it needs to be structured carefully and correctly from the start. I really can't emphasise that strongly enough.
Without any further info (which I wouldn't expect you to post on a public forum) I can't offer too much more advice but generally speaking, the answer is "yes" and it's something we help customers with all the time.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
HI Jamie,
Thank you for your reply.
If I can share a bit more info, I would like some basic advice on where to start.
Current IP is in my name. owing 230K split loan 150 fixed IO, 80K var IO with offset facility (neg geared)
Our home in my husbands name. owing 150K var IO, 30K var I+P with offset facilityBoth properties are independent (not secured by each other), as they were separately purchased before we were married.
Both properties are now worth more than what is owed on them as they are newly renovated, estimate market values suggest this.Is it wise to save up deposit and pay in cash (which will take more time), or should we borrow more off our existing home loan?
Do the banks need to know that you are using that money for another IP?What would be the best way to set up the loan on the next property? considering that it’ll be our home in a year or 2.
I would like to definitely get some professional advice, but I don’t live in Sydney, and I’m worried that I won’t find any decent advice in a rural NSW area.
Sorry about all the questions, kind thanks.
audio123 wrote:Is it wise to save up deposit and pay in cash (which will take more time), or should we borrow more off our existing home loan?I would considering borrowing from your current PPOR to fund the deposit/costs for your next property. These funds will be deductible whilst the property is an IP. I'd keep any savings as a cash buffer (use the banks money – not yours).
audio123 wrote:Do the banks need to know that you are using that money for another IP?Yes.
audio123 wrote:What would be the best way to set up the loan on the next property? considering that it'll be our home in a year or 2. I would like to definitely get some professional advice, but I don't live in Sydney, and I'm worried that I won't find any decent advice in a rural NSW area. Sorry about all the questions, kind thanks.As long as you have email and phone access you don't need to settle for the brokers/bankers in your local area. I've never met the majority of my clients face to face (many are from this forum). <edit>
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Audio.
My 5 cents worth.
Dont waste time shopping around for a regional broker to help you just drop Jamie a line and get it sorted out be a true Professional who knows his stuff.
I have seen so many clients come a cropper because they have not structured such a loan correctly.
Seem to spend all of my working day these days fixing up the mess made by many a lender / broker so dont leave it to chance.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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