Hi Guys,
I am yet to step my foot in to the real estate market, and for the last few weeks am able to gain considerable knowledge through this helpfull forum.
At the moment the question that am facing is:
Whether to buy a IP or buy a house upto 270K, move in…. and then when i have some equity in there, buy an IP?The benefit of IP would be Tax benefits…. whereas if i have my own house… its an asset and security.
Please help.
Welcome to Forum,
It’s hard to answer this question. Depends on what do you want to do and which way.
PPOR ( own house ) is not asset it’s a liability.
Good luck!
Cheers
PropertyGuRu [sultan]
Mortgage Consultant
[email protected]NZ loans and pre approval from 7.99%
Factor in SD exemptions, CGT exemptions and the FHOG too.
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 9853 year fixed rate – 6.85%
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Yep… Have been thinkin on this issue for long and am glad for your quick response. Am a bit more inclined towards IP, hopin to get some tax benefits + property value grows in time.
By the way, for a IP, other then depriciation, what %age of rebate ie. taxable income can u claim off ur loan payments?Hi all,
I’m also looking for start up help.
My wife and I are looking to invest in positive cash flow residential or commercial property.
This is our situation:
Combined income $100K.
Our home is valued at approx $550K, we owe $390K, this includes home loan and an equity loan we have.
Our house is bigger than we need.
Should we downsize or keep this place for the capital growth (house is 4km from Perth CBD)? We should have enough equity to be able to start buying investment properties??I know we have a lot of research to do before we make our first IP purchase so would appreciate any valuable advise from any of you knowledgeable people out there.
Cheers,
DougOriginally posted by praveentalwar:
By the way, for a IP, other then depriciation, what %age of rebate ie. taxable income can u claim off ur loan payments?Hi Prav,
The interest component only is a deductible expense.
For example (simplfied numbers only) if you are paying a $1000/month of which $200 is Principal & $800 is Interest in repayments only the $800 is a deductible expense.
The $ amount of your tax return is calculated and determined by your tax rate based on your total taxable gross income.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by DeFinitive:Combined income $100K.
Our home is valued at approx $550K, we owe $390K, this includes home loan and an equity loan we have.Hi Doug,
The critical issue is what do you want to achieve from property investment. In many respects the answer to this question will determine what is bets for you.
Based on the limited information provided it would appear that you have approximately $50K or releasable equity (@80%). This certainly would allow you to enter into the property investment market in some form or other.
A key question is how comfortable are you with current loan repayments given your monthly interest bill alone would be in excess of $2000.
There may be capacity to ‘scale down’ into something smaller – whether or not this is a viable lifestyle option can only be answered by yourselves.
I know if I suggested scaling down to the wife it wouldn’t be our house that was scaled down.
If you do ‘scale down’ your existing profits will be CGT free as you would be selling your existing home – there would be some leakage of profit though in things like stamp duty, mortgage duty and agents fees.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by **PropertyGuRu**:PPOR ( own house ) is not asset it’s a liability.
I’m not sure if Kiwosaki came up with this saying or just borrowed it. It needs clarification.
Of course your home is an asset, consult the dictionary. Kiwosaki jigged the definition of an asset to “something putting money in your pocket, not taking it out” if memory serves me. The idea being your house is putting you in a -ve cashflow position due to ownership costs and no rent coming in + capital tied up.
With a build up of equity in a home there are well known ways of putting this lazy money to work anywhow.
“Write the wrongs that are done to you in sand, but write the good things that happen to you on marble.” Arab proverb
Derek,
Thanks for the reply.
I could have explained our circumstance a bit better. Our total debt is 390K, the mortgage is 290K and the equity loan which started at 60K is now 90-100K. The equity loan is made up of various investments where the dividends paid quarterly go towards paying off the mortgage.We are comfartable with our repayments and we’re actually paying more than required, so we’re ahead in that respect.
My goal is to invest in CF+ve property and or capital growth property, residential or commercial with a view to building a large portfolio in a reasonably short space of time with the ultimate goal of retiring around say 50 or earlier if possible.
From reading the various threads I see that NZ seems to be the only CF+ve place to buy property these days.
Cheers,
Doug
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