Hi
I have been actively viewing this website for about a year now, but this is my first post. About 4 yrs ago my partner and I built a house off the plan and still reside in it. It is our first house.
I'm not looking to move any time soon but am curious as to what people think about this topic. A number of people I know (including a couple of real estate agents) have said they would never rent out a property that was originally their home because tenants will not treat it as well as you do (like a home) and you'll just be dissapointed no matter how good a possible tenant looks on paper.I understand there are possible tax advantages, however are you better off buying properties only as rentals and only as PPOR and not overlap the two?
Thanks
Hi,
It's certainly worth considering the emotional side of it – can you watch someone else living in your home and not caring for it the way you do? Only you can decide that – some people are OK with it, others aren't. If you can, it's certainly worth thinking about because the capital gains tax rules make it attractive, and it's much better to have the government give you a discount on your interest payments and expenses. In my mind, any property I buy is just there for investment purposes, whether I live in it or not (right now I don't live in anything I own and I'm not planning to change that anytime soon).
Cheers,
jkmtHi
Unless there is a reason to move eg: need a bigger house etc, why do it. Just make sure you are paying as much equity into the PPOR as possible so that if needed you can then redraw it to help purchase an investment property.
We still drive past our first house (that we renovated and sold) wondering how it is going.
That is something about property, once you have lived in it there are memories.
Minimise the amount of equity from your home that you have to use for security on the IP purchase. That way as equity builds overall you can probably remove the PPOR as security altogether.
Regards
coon82 wrote:HiI have been actively viewing this website for about a year now, but this is my first post. About 4 yrs ago my partner and I built a house off the plan and still reside in it. It is our first house.
I'm not looking to move any time soon but am curious as to what people think about this topic. A number of people I know (including a couple of real estate agents) have said they would never rent out a property that was originally their home because tenants will not treat it as well as you do (like a home) and you'll just be dissapointed no matter how good a possible tenant looks on paper.I understand there are possible tax advantages, however are you better off buying properties only as rentals and only as PPOR and not overlap the two?
Thanks
We are on our 4th PPoR, which is now an IP.
After a while, it becomes just another property, and any superficial damage a tenant does can be repaired, repainted, recarpeted etc.
Once it becomes an IP, your PPoR is eligible for all the same tax breaks as any other IP.
There is one advantage of having lived in a property prior to renting it out and that is it may be exempt from CGT if sold within 6 years and you can claim all the usual rental expenses as well.
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
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