We, like so many, are at that intersection of whether to start investing or ‘wait and see’.
Our PPOR has 400k equity and a block of land we purchased a few years back has 80k equity. We have approx 15k cash as we have just spent the money on council plans to one day build on this block. Our investment goals are less than building a portfolio to geneate high income/retire (we still have 30+ years until retirement age), but more to one day generate enough capital growth to build our dream house mortage free.
So my question is in the current climate, would it be wise to use equity to purchase an IP in our area now which is showing positive growth trends and negative gear or wait until we save a much greater cash deposit and be able to potentially positively gear.
We see ourselves purchasing several IPs in the 3-5 year future which will open the opportunity to purchase an IP in a higher rent yield area.
Hi Start
Given you are looking more for capital growth in order to realise the profit for your PPOR rather than build a long term rental stream i don’t see an issue in utilsing the equity in your PPOR for this.
Structured correctly the rate of interest should be fairly sharp and you should be able to limit the amount of CGT payable.
Cheers
Yours in Finance
0-40 properties in a decade. Ask me how.Richard Taylor | Australia's leading private lender
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