hello everyone
this is my first post and im in a bit of a pickle of what to do
Im currently in the defence force (69k per year) based in brisbane qld, and unsure whether to invest or single owner/occupier, i have been pre approved for a 390,000 loan with a 55,000 deposit
If i was to owner/occupier i would recieve
Pros
$7,000 FHOG
$12,000 army house grant
$9000 lump sum from DOHAS because i have deployed to afghanistan
ill save $12,000 on stamp duty
thats all up $40,000
cons
i would have to pay of the mortgage by myself and live in the house for year before i move out and lease the property out
and live like a tightass budget
investment property
pros
tennants income help pay majority of mortgage repayments
have extra money for repayments, live alot better than paying off the mortgage by myself
cons
dont recieve any of tthe first home buyers benefits
have to pay stamp duty $12,000
my question is which option i should do or benefit from more so
cheers if anyone can help me out
Well, it takes a woefully long time to build 40k in either capital growth or savings… so that's a pretty tasty carrot.
But as you say, a budget tighter than a ducks bunghole is no fun (nor smart).
Can you get a housemate (or two) under those arrangements? or does them 'paying rent' affect the FHOG or other grants?
I should add: that 40k sitting on the mortgage would also make a pretty big difference to your cashflow situation later on when you DO rent the place out… we are talking a full 10% of your target purchase price. Or it could be drawn on to fund other investments if you are in a position to take advantage of them, further down the track.
Also, do you lose any of those benefits if you just buy an investment property now? Because that would suck.
Hi Daniel,
Would you be receiving the $12k grant and the $9k lump sum payment if you used the property as an IP or do you just get that if it was a PPOR?
Is there a reason who need to live in the property for a year instead of 6 months?
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Thanks for the replies grinma and finance shop
my girlfriend will be living with me and paying $300 a rent p/f as she does now which will help out alot.
yeah i lose the benefits of the army grant of $12k and DOHAS of $9k if its an investment property, plus ill have to pay stamp duty of $12k essentially
saving $40,000 on living in the property for 12 months.just have to live like tightass haha
as a condition of these grants the army stipulates i must live in the property for 12 months before i can move out and lease it out.
im leaning towards the Owner occupier to get all the benefits, ill also have an offset account which all these benefits will go into so
ill have $28,000 sitting in the offset account reducing the interest i pay.
thanks for your help i appreciate it
Thanks for the replies grinma and finance shop
my girlfriend will be living with me and paying $300 a rent p/f as she does now which will help out alot.
yeah i lose the benefits of the army grant of $12k and DOHAS of $9k if its an investment property, plus ill have to pay stamp duty of $12k essentially
saving $40,000 on living in the property for 12 months.just have to live like tightass haha
as a condition of these grants the army stipulates i must live in the property for 12 months before i can move out and lease it out.
im leaning towards the Owner occupier to get all the benefits, ill also have an offset account which all these benefits will go into so
ill have $28,000 sitting in the offset account reducing the interest i pay.
thanks for your help i appreciate it
Hi Daniel,
If you rent the property for $450 net (i.e. after the agent fees have been taken out) then that's about $23,400 per annum plus another say $5k in negative gearing. You can already see which option is beneficial.
The other benefit of living in the property first is that you will be able to renovate or fix the property during the 12 months to ensure that you can potentially get a bit more rent moving forward. This of course is dependent on your budget.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
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