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Having a pool is a great feature but not all tenants look for it in a home.
So this may hurt your chances in finding the right tenants plus there are also the extra maintenance costs.
Also it will restrict you in the future if you decide to extend or construct a granny flat at the back.
Cheers,AndrewTrue, but if you get a tenant who wants a pool, they want a pool. We rented our PPOR with a pool to tenants who wanted a house with a pool. 7th anniversary of them being in house comes up next week.
they might need to sell both together to get the capital gains exemption on yhe vacant block if the house is their PPOR
You might be better to build the cost of maintaining the pool into the rent
You need to get a value when the ex Ppor became income producing. That’s your new cost base. So that becomes your cost plus acquisition costs – legals, stamp duty plus selling costs.
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This reply was modified 8 years, 5 months ago by
crj.
There might be a CGT issue or a GST issue for your Dad. Doing things on the cheap can be very expensive.
Should you hold? consider the future of the particular mineral, workforce requirements, is there an excess or deficiency of housing. Reserves of mineral etc etc. Is thereanything elseabout the town?
I’ve got an industrial investment in a mining town. Value has probably gone down 20% in last 3 or 4 years. On the other hand it’s still worth double what I paid 11 years ago and is yielding 10% on about 70% occupancy. 3 major minerals mined in the area. Future growth of town probably low.
You will be guaranteeing the bank that the loan will be repaid. Maybe this means you will put up other property as security too. You are building to develop and onsell, no capital gains tax as you are doing this as a business. Get some good advice on GST too.
Link to roll-overs for people who want to read up, was interesting to see a crown lease and mining rights exchange…..would have been covered.– https://www.ato.gov.au/General/capital-gains-tax/cgt-exemptions,-rollovers-and-concessions/rollovers/
I hope the Obeid family was able to be advised about this.
Just remember holding on for a particular price has a cost too and at the moment as the price your half wants isn’t being offered it is unlikely the house is worth that much now.
No. Roll-over events in Australia would not cover that.
It’s OK to be fussy when someone is spending several hundred thousand dollars. Your other half bought a house to live in without the means to pay for it except by selling another property. That does not fit my definition of investing in property.
If you posted a link to the ad someone might have other suggestions.
why hasn’t the house sold in 12 months? Has it even been listed? Were any offers made? Why the problem with the banker? Seems to me the problem is your half borrowed money without income and then has not done what the bank was told would happen, ie sell the first house. Talk about a sense of entitlement, the hide of the bank to assume borrowers will do what they say they will do.
There are a number of solutions:
1. drop the price until the house does sell
2. find more work. Going on what rate I pay cleaners at a further 22 or 24 hours would get her up to $35,000 pa. If she’s a really good cleaner then she should consider house cleaning. I pay $31 a hour to my house cleaner and $35-$40 is common
3. your half sells two-thirds or three- quarters of the first house to her sons. Are they living in it? They might be able to get a first home owner grant or at least reduction/exemption in stamp duty.If your half is stressed then maybe she needs to talk to lifeline or some other counselling organisation.
any expenses such as rates, insurance, interest, mowing etc that have not been claimed as tax deductible can be added to the cost base
Each state has different laws. Your friend should instruct agood qld solicitor imediately. There are a couple who have regular articles in API.
You are still not being very clear. Is your bank lending you enough so that you can settle the purchase? Is the personal loan so that after settlement you can renovate the second building?
If so, settle and scrounge the other $50,000 a different way eg in Port Macquarie a few years ago one of the credit unions would give an unsecured personal loan for renovation to a home ownerif their salary was depositedto the credit union.
Hi vyaw2003 great stuff. Tongue in cheek there area number of things you are doing wrong:
1. Your investments are making money. How can you goto adinner partyinSydney and bragabout your negativegearing. I was in thesame situatioafew yearsback. a rundown property – spruced up tenanted 25% return on purchase price. Everybodysays I’m crazy who would ownthat kind of property? I justsmile and agree, after all I don’t want competition.
2. You arerepaying loans. Take an example from Bondy and Skasey, just keep borrowing and assume people will keep lending even when the bottomfalls out of the market.
3. You can sleep at night, your blood pressuredoesn’t go up if you have a couple ofvacancies
4.You have aplanIf you have any armchair critics justtell them youwilljust keepon doing what youhave been doing as you preferyour method of doing even if itis imperfect totheir method of not doing
Why can your Dad sell the front house in 6 years and avoid CGT? You said your oarents bought the property in 1986 after CGT was introduced and difn’t move into the front house until June 2015. Bear in mind that if your parents a on a oension or wanting to get one that gifts they make will affect their eligibility fir a pension.
Your method is working for you. You need to do what helps you sleep at night.
Read this http://lifetruthordare.com/american-businessman-and-mexican-fisherman/
It seems to me you have got something that gives you contentment/happiness – a young family and your dream home. If you can keep that then you’ve got what you want.
Good luck
You can only have one PPOR at a time. However, if the first property means so much to you that you want to try and keep it, then although you buy and move into the second property, you can still nominate the first property as your PPOR. To minimise capital gains on your second property you can include in its cost base items that you are not able to claim on tax eg interest, indurance, rates, maintenance etc. So for example you buy a place for $500K, pay interest at 5% on $500000 for 5 years, then you won’t pay any capital gains unless you sell for above $625K. This is a very simplified example. Unfortunately these costs such as interet, insurance etc can’t be claimed as a capital loss if you sold for less than $625000.
Yes if you kept the first property for more than 6 years and then sold you might have capital gains tax to pay. If you have lived in the first house from as soon as possible, then when you first rent it out the cost base is reset to its value at the day you first rent it out. So if your house and land cost $400K and the value when you rent it out is $600K then as a general rule you will never pay capital gains tax on the first $600K.
If you rent the place out get a depreciation schedule as that will help minimise any tax payable on the rent.
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This reply was modified 8 years, 5 months ago by
