Hi guys what a helpful bunch you all are. My dilemma is below and sorry it’s going to be long.
Just split from partner( so sad)
I’m in his house but no deadline to move out and I’m not paying rent
I have a house in canberra worth about $400K -$420 which tenants are moving out of by 1 July. they were paying $420 a week rent
I can move back in but emotionally I need to move on and start again
House was positively geared. I owe $94K on homeloan and also have a LOC of $100K with $62K owing
I am self employed and this years tax return will be a loss. I am literally not earning income right now.
I was going to renovate the house using LOC with new bathroom, carpets and landscaping hoping to maybe get $450?
I really want to become a property investor and renovator and use my equity but I have no regular income
everyone I know says never sell a property, especially a positive geared one
It would be cheapest for me to live there but how would I ever get another property to invest in?
Should I sell, put money in bank and wait for property prices to drop further and then buy ( hoping I can get finance)?
I have 2 kids to support so need to really make the best financial decision, and one I can afford.
Thanks for your timeHi tiggie,
Firstly i am sorry to hear about the break up with your partner which is never nice.With the equity you have in the property and with potential rent from both this house and any potential new investment property you purchase I am sure that finance is achieveable. Maybe not easy but doable.
You really to work out in your mind if you rented elsewhere what would be your weekly comittment for the sort of property you would like to reside in compared to the repayments you would be making on the Canberra property. Your weekly interest payment on a $200K loan is circa $240 / week so unless you feel you can rent a property for the equivalent it certainly maybe worth considering moving back into the property.
Admitedly if you rented the property this would enhance your Taxable income however your rent is unlikely to be a Tax deduction (accepting he fact you maybe able to claim a portion thru your business).
Not an easy decision but remember buying and selling costs money and erodes your equity over time.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks once again Richard. You’re very generous with your time and knowledge.
Hi Tiggie,
Firstly sorry for your break up.
My advice is your situation is not sustainable long term, therefore you are going to need to acquire an ongoing income even if it is part time or casual work to strat with. It may also be an opportunity to get out of the house and meet some new people. I would leave everything as is for the moment and take some time out to reflect on what you want to do work wise and lfe wise. Then jump in.
The professional renovation idea maybe it but start this off slowly with another regular income job as many try and fail doing this.
Marty McDonald | Mortgage Experts
http://mortgageexpertsonline.com.au/
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