Hi all
im new to the site and am seeking sum help !!Im 24 and at age 21 i bought a property for 168k
i owe 140k on it
the value of the property is now 280kIm concerned that my capital gain is not going to keep increasing over the next 5yrs and my rent is only 220pw
Im considering selling and buying a block of land with the cash out of my house sale
then build a house on it
my loan will be 200k instead of 140 but my rent will jump to 350pw plus ill make sum equity in the house by building it
my concern is how long do i have to live in my old house to get around paying capital gains taxany advice would be welcomed
John
Hi Johnny,
Depending on your servicability, you may be able to keep the current property and borrow against the equity that you already have in it to purchase the new place.
If you borrow up to 80% of the current value, you can get access to and extra $84,000 for investing. The cost to access that money is a lot cheaper than selling. 84k is a very good deposit for the block of land or other purchase.
Mal
Getting out of your comfort zone, can help you become comfortable
You will pay CGT on the time you rented the place out. If you move in for say, a year you will save CGT on that period.
I suggest you consider keeping it. Even if flat for 5 years you will have saved the cost of selling and also of buying another IP to replace it at that point. This is substantial.
If there is one regret I have with my IPs is the ones I sold to realise a profit. If I had held them I would today be at least $250K better off and I could easily have held them. I guess this wisdom comes with seeing several cycles.
A good broker will quickly let you know if the lenders will allow you to own both.
All the best
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks for the input
im earning 50k per year and living at home with a company car so i have minimal costs
my curent repayment is $250
my rent is $220-10 realestate feesim worried if i buy another investment property
say a loan of 250 K
rent = 250
so ill ahve to put about $150 into it
this is not a drama at this stage but im worried
it may limit the amount of cash available to me if myself and my girlfriend decide to buy a property in the futureI would just like to set myself up so that in the future ill have a decent investments
any ideas
should i just get into another property asap
as its a good time to but im my area as prices have stablised
Im in the hunter region so im hoping that prices will not drop substantilalyCheers for the input
Johnny
Hi Johnny,
As our existing property is pretty muh paying it self off, just leave it doing it’s thing and moove on to a new purchase using your equity.. Hunter is great in some parts, also you should look outside the square to interstate also..
Love to help..
Roy H.
L.R.E.A., Dip FS (FP)Guardian Property Specialists (GPS) is a research-focused company that specialises in sourcing and providing residential investment properties Australia wide!
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