All Topics / The Treasure Chest / $7000 homebuyers grant Vs renting

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  • Profile photo of spannerspanner
    Member
    @spanner
    Join Date: 2003
    Post Count: 8

    Hi guys and gals,

    I read the book last night and could not put it down! I was/am VERY sceptical as I have been BADLY burnt by a multi level marketing “business”.

    I have discussed very vaguly with my partner Chris(tine) and she could not get off the topic of why would we rent a house to live in and buy a a house to rent out and thereby miss out on the $7000?

    If we are eligble for this would it not make sense to buy a house and live in it rather than miss out on the $7000?

    By the way I am very tierd….bought the book at 730pm and finished my first reading at 230 am. Will go back and re read in the folowing days and weeks. I say this because I feel so dirty buying yet another get rich (albiet not quick) book. I spent over $3000 on this sort of crap before but this one does just seem to be a little bit different.

    AHHH ramblr ramble ramble….

    Regards db

    Profile photo of deckartjazzdeckartjazz
    Participant
    @deckartjazz
    Join Date: 2003
    Post Count: 14

    Hi Spanner,

    In the first year you can rent your PPOR out, get the FHOG and then move into it before the end of the first year. So you get say 11 months rent + FHOG.

    May be an alternative?

    Profile photo of mcdeyessmcdeyess
    Member
    @mcdeyess
    Join Date: 2003
    Post Count: 56

    Hey Spanner,

    Your situation sounds very similar to mine (except of the getting burnt part [:(] ) I was looking at maybe using the FHOG plus some of my savings to get my PPOR. Then using the rest of my savings to buy a place with an Interest only loan. I would use the Rent money to pay extra off my PPOR mortgage for a while, when the rental property increases in value (hopefully) then I would sell and use the Capital gains to buy property under a buy + hold method and maybe pay a little more off my home. That is how I am thinking at them moment anyhow, I am pretty young and still learning but that is just another idea I was looking at. Hope I have been of some help.

    Profile photo of crashycrashy
    Participant
    @crashy
    Join Date: 2003
    Post Count: 736

    “when the rental property increases in value (hopefully) then I would sell and use the Capital gains to buy property under a buy + hold method”

    If you sell, you lose heaps of the profit in CGT. Just get it revalued, and use the equity to buy a new place.

    What are the FHOG rules?

    Do you have to hold it 12 months? Or just reside in it at some point within 12 months? So a month of renovating at the begginning is enough?

    Profile photo of aussierogueaussierogue
    Participant
    @aussierogue
    Join Date: 2003
    Post Count: 983

    g’day spanner. it depends on your goals.

    remember if you take advantage of the first home ows grant you will have a nice house and all the great things that come with that. completely valid!

    the downsize is that it will limit your potential to invest in the future because it will tye up or reduce your ability to fund other investments. ie
    you will more than likely have a large mortgage and all your funds will go to servicing that.

    if you were to buy an investment property and forgo the fhog, it is feasable using steves method and other +ve cashflow vehicles, that you could keep investing to build a large portfolio.

    things to think about
    – most people want a place to call there own – if this is you then buy a house to live in.

    – if you want to maximise wealth all the investment books ive read recently suggest
    a) yr home is a liablilty
    b) only buy assets that generate income
    c) cash flow is king

    for your guide i believe steve still rents eventhough he owns 130 preoperties.

    at the moment i rent and have decided to invest.
    this is tough because i have a baby on the way and the pressure from yr peers/family etc to buy a ppor is immence. im lucky my wife is 100 pct supportive (i encourage her to read the books and take the journey aswell)

    either way is valid but be prepared investing takes you out of your comfort zone

    cheers

    Profile photo of RichoRicho
    Member
    @richo
    Join Date: 2003
    Post Count: 24

    I was about to ask a question of the rules of the FHOG and then I thought that I may as well try to find some info on the web. I found this government website which may help http://www.firsthome.gov.au/

    I have no property and I’m thinking the best thing for me to do at the moment is buy a PPOR, live in it for a while and then rent it out. I’m trying to work out whether I would technically have to live there for the whole 12 months before I could rent it out? I would imagine this is a pretty common scenerio, does anybody have any experience with it? I have heard of one case where a person had to pay back the FHOG, something to do with a mix up with settlement dates.

    Profile photo of RichoRicho
    Member
    @richo
    Join Date: 2003
    Post Count: 24

    Me again,

    I guess the interesting point to me was “An eligible home must be occupied by the applicant(s) as their principal place of residence within 12 months of completion of construction or settlement of the home.”

    Hmmm ‘within’ 12 months, that is a bit vague, to me that means I can move in after 11 months and 30 days, live there for a day and then move back out and rent it out again. Or live there for a day or so in the beggining do some work on the place and then move out. There is no limit on how long you must reside in the place for to remain eligible, or am I missing something?

    Profile photo of caz_in_perthcaz_in_perth
    Participant
    @caz_in_perth
    Join Date: 2003
    Post Count: 29

    Double check with the state revenue office. I did and found out that in WA at least, you can buy an IP, not claim the FHOG and STILL get the FHOG later when you do buy your first home to live in.

    Also, if you claim the FHOG you have 12 months to take residence and there is no set amount of time that you need to remain in the property. BUT you must genuinely make it your principal residence (not just get some mail sent there as somebody suggested to me once).

    Another thing to consider is the length of time you and your partner have been defacto. In WA it is 2 years. My partner is eligible for FHOG even though I am not because we have lived together less than 2 years. If you do not buy jointly perhaps you could each buy a property and satisfy the residence requirements on each property at some time during the first year. Talk to your FHOG office, if you know the rules you can maybe use them to your advantage.

    Profile photo of spannerspanner
    Member
    @spanner
    Join Date: 2003
    Post Count: 8

    ppor? what does this mean?

    Aussierouge….I also have a little one on the way…..and I also have a very financially conservative partner whereas I am a little more open. Would love to “chat” to you about this.

    is is against the rules to give out email addresses on the forum?

    I also have concerns about the validity of the fhog and renting it out …will have to research this in greater detail out of work time I think.

    thanks for all your responses.[:D][:D][:D]

    Profile photo of aussierogueaussierogue
    Participant
    @aussierogue
    Join Date: 2003
    Post Count: 983

    spanner

    ppor – promary place of residence ie your home!

    you can post yr email and ill email you back

    cheers

    Profile photo of aussierogueaussierogue
    Participant
    @aussierogue
    Join Date: 2003
    Post Count: 983

    i mean primary not promary. that would be kath n kim

    Profile photo of spannerspanner
    Member
    @spanner
    Join Date: 2003
    Post Count: 8

    aussierogue,

    thanx.

    my email is dgb69 “at” homail.com

    you must put the word banana in the subject box to allow it through my filter.

    thanx.

    db

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