Hello there!
I am very keen to buy and renovate using equity (300K)from my own house. Is this advisable and are there any handy tips on this idea? I hope this isn’t a silly question as this is my first post!Cheers Hagget[blush2]
Hi Hagett
welcome to the forum.
Personally i think the buy and renovate strategy is a good one, I have no problem with you using money from your own home to finance the property.
One thing to think about. What is your long term strategy with these properties? Why i ask this is because i made some mistakes a few years back.
I bought properties to Reno, then rent out and sell 12 months later to qualify for the 50% capital gains tax exemption. Sure i did well and made some money but i could have made more. My issue was that when it came time to sell the houses they were now in a slightly used condition. I would have been better to buy it rent it out for 12 months , then fix it up and sell it when it was in mint condition.
Just something to consider.regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi Hagget,
A few suggestions,,
Organize a split loan when releasing equity from PPR.
Split 1: Debt on PPR = non-deductible.
Split 2: Debt on Investment = deductible debt.Consider a 100% offset attached to PPR portion of split loan.
Place the funds raised from equity (investment split) in the offset account until required for deposits on future investment.Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:1800 820 500
VICTORIAPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
I concur with Steve.
It is vital that you structure this for tax effectiveness – it also is important to determine how long you will own your home for and what you will do with it should you move – ie sell or rent it.
All the best,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985NODOC Loan – 65% Loan – No questions asked!
Comments 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 advice guys!
My short term strategy is to take in as much information as possible, handy tips, financial advice, what property types etc. as well as actually making the purchase. Long term I plan to buy, renovate and sell every 12 to 18 months, whist building on my knowledge and skill. I have learnt from neighbours how buying, renovating and selling has greatly improved thier financial position.
Meanwhile I’ll keep scanning these pages for lots of handy hints and hope to eventually trade advice along the way!Cheers
Hagget[blush2]That is a fair amount of equity. If you could get a LOC, you could possibly buy a property for cash, do a quick reno and then mortgage that property at the value (rather than purchase price), releasing 100% (or more) of the money you put in originally, and then do the same thing again.
Terryw
Discover Home Loans
North Sydney
[email protected]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
You must be logged in to reply to this topic. If you don't have an account, you can register here.
