Hi all,
I am after advice on structuring loans for a new PPOR. Before I lay provide the scenario below, I am aware that making a freehold PPOR into an IP generally is generally not a wise move financially. None the less, the scenario is as follows:
Current PPOR Value: $400K
Rent Achievable on this property: $370.00 per week
Current Cash/Savings: $100KNew Property Purchase Value: $620K
Is it possible to try and make the current freehold PPOR, cashflow neutral as an IP? This would mean I would re-mortgage a portion of this home on interest only and put this sum into the new property, this reducing the new PPOR payments. However, can the loan interest be used as an expense with the property currently being freehold?
Any advice on how to structure the above would be greatly appreciated.
Thanks,
Scott
Hi Retals,
Terryw, a contributor with a wealth of knowledge, has laid out a scenario that exactly fits your situation (i.e. you have paid off your PPOR, but now want to move out of it and rent it). Go here to find an introduction to his topic :-Once you have clicked on that link, read the post, then click on its link to go to Terry’s topic – his ideas are worth gold !! Let us know how you found his advice – did it suit your circumstance?
Benny
Who is the property owned by Scott ?
If jointly with a spouse then a couple of things you can do.
Probably the question most asked over all 15 years i have been involved with the forum so you are not alone.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Richard,
The current PPOR is jointly owned with a spouse.
Thanks,
Scott
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This reply was modified 7 years ago by
Retals.
Hi Benny,
Thanks for the link. I will have a read through Terry’s advice tonight and let you know.
Regards,
Scott
Remember security for the loan doesn’t determine deductibility of interest. It is the use that counts.
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
Ok Scott certainly opens up a opportunity to go some way towards what you are wanting to achieve.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
aside from the above advice,
“Is it possible to try and make the current freehold PPOR, cashflow neutral as an IP?
firstly, if you had more rental return yes possibly. for e.g. 10k on reno and increase rent by $40PW your far closer to that goal.
really comes down to the exact specific situation and how you want to tackle it, but depending on a stack of variables you could come out far ahead then if you do the stock standard approach.
Kind regards
Jaxon Avery
Jaxon | Jaxon Avery – Financial Adviser
http://www.jpafinancialservices.com.au
Email Me | Phone MeJPA Financial Services Pty Ltd
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This reply was modified 7 years ago by
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