Hi
I am looking for some ideas/suggestions for my investment strategy going forward.
My current situation:
1) I have an investment property in London, UK. The mortgage has been paid off and the flat generates £1,100 per month – nice. I have owned it for 12 years and rented it since 2003, it has never experienced a tenant free period of more than 1 week in all those years. It is worth £275,000 & I am not using that equity effectively.
2) I own a house in Sydney, Australia which we live in. Its worth around $2 million and has a mortgage of $500,000 left on it – so a lot of equity there I am not using effectively.
My strategy:
I am planning to buy an investment property in Australia around the northern beaches area of Sydney for approx $800,000. I will rent it sometimes (holiday rental/short period rental) & my parents can use it when they visit Australia from the UK for 3 month chunks (saves them renting a place).
Basically allowing me to negatively gear myself and become more tax efficient here in Oz, which currently I am not as I do not get any tax deductions.
Other options:
I have been reviewing other ideas, which I have listed below and I am keen to hear if there are others I have not thought of and should consider.
– Buy a UK flat for approx £300,000 and increase UK rental income from £1,100 to approx £2,200 to pay the new mortgage (problem – I cannot raise a new UK mortgage as I do not work & earn money in the UK?)
– Buy a UK flat to rennovate with my sister & builder brother in-law (problem – it is a more risky option relaying on family members)
– Buy a new property in Australia and rent it out 100%, leaving my parents to rent when they visit for 3 month chunks
– Any other ideas?
Thanks
Maybe take a look at commercial properties in the United States. As the economy picks up we will see strong growth in quality assets. Now if we look at funding today it is easy to get at least 60% funding on these properties through commercial banks. So this means that you can leverage quality investments that will provide cash flow and capital growth.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
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Hi Ketauk,
You said, "I am planning to buy an investment property in Australia around the northern beaches area of Sydney for approx $800,000. I will rent it sometimes (holiday rental/short period rental) & my parents can use it when they visit Australia from the UK for 3 month chunks (saves them renting a place)."
And a little later, "Basically allowing me to negatively gear myself and become more tax efficient here in Oz, which currently I am not as I do not get any tax deductions."
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Make sure you get good tax advice on this aspect of your plans. Buying an investment property and then allowing your parents to stay in it for extended periods of time may compromise your plans to reduce tax.
From a strictly 'keep it simple' point of view your later option, "- Buy a new property in Australia and rent it out 100%, leaving my parents to rent when they visit for 3 month chunks" makes most sense to me. It keeps tax matters very clean, opens up a range of investment options within Australia, including your local area which was your earliest option.
Hope this helps.
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