Hi guys, My partner and I are looking at buying a 2 bedroom unit in Brighton, VIC as a PPOR. We plan on living in it for approximately 8 years. We would then like to buy a family home somewhere else while renting out the unit. We wish to hold the unit for life and use it for income. Is the best way to set up the loan by borrowing %80 of the property value as an interest only loan with an offset account. We don’t want to pay off anymore on the loan for future tax deductions we could use when renting the property out in the future. Any extra income we put into the offset account we will redraw to make the future purchase of our next home.
Does this sound like the correct setup? Any advice would be greatly appreciated. Thanks
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This topic was modified 9 years, 11 months ago by
Bobby.
Hey Bobby,
You’ve got the basic set up down really well.
Do you plan to buy more properties after this purchase?
Or are you just buying this PPOR now and then 8 years later get another as PPOR and convert this to IP so in 8 years time you are only looking at two properties is this correct? What is your goal? Why do you want to invest in properties?As each person’s circumstances is different, so as their goal. Some would like to acquire 20+ properties and some would only focus on 3 or less. Determine your goal and work backwards from there.
PHP | Mortgage Station Pty Ltd
http://www.mortgagestation.com.au
Email Me | Phone MeGive us a call or send us an email for a free residex report.
Bobby than limit yourself to an 80% lend why not borrow 100% and use the 20% as collateral cash security.
That way when you eventually rent the property out you will be able to claim a Tax deduction on the full amount of the original loan.Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hey Bobby
Best to get a decent finance person to sort this out for you – they don’t get much better than mr 007 himself. Richards details are above.
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 guys, My partner and I are looking at buying a 2 bedroom unit in Brighton, VIC as a PPOR. We plan on living in it for approximately 8 years. We would then like to buy a family home somewhere else while renting out the unit. We wish to hold the unit for life and use it for income. Is the best way to set up the loan by borrowing %80 of the property value as an interest only loan with an offset account. We don’t want to pay off anymore on the loan for future tax deductions we could use when renting the property out in the future. Any extra income we put into the offset account we will redraw to make the future purchase of our next home.
Does this sound like the correct setup? Any advice would be greatly appreciated. Thanks
Good set up, but could be improved.
Borrow 100% like Richard suggests, but I would suggest you consider buying in 1 name only. When you move out sell to the other spouse who will borrow to buy. This could potentially double the deductible portion of the loan and free up cash to pay for the new PPOR. Indirectly you will be borrowing to buy the new PPOR and claiming the interest. There should be no stamp duty or CGT on this either. Just a bit for legals and tax advice. but seek legal advice before doing this as there are many issues – e.g. you spouse as sole owner could die and leave it to the rspca for example
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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This topic was modified 9 years, 11 months ago by
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