hey everyone,
just like to say hi as im new to these forums.
ive been reading alot of things on these forums and i think its about time to ask a few questions myself.
anyways here i go,
firstly im a 20 yr old male living in perth with no PPOR. i work away up north and am only home for a week and a bit every month so i tend to just stay at my gf's house (lives with her parents).
I have been really wanting to get into the property market weather it be my own house or investment house ( i just want to start the ball rolling).
I earn quite a substantial amount of income for my age ($100K+) and i find i spend it on junk. i have about $10k saved.
im looking to buy in perth, but dont know which route to go down. weather to buy my own place and get the benifits of FHOG and no stamp duty, or to buy straight into investment.
it does not bother me which way i go.
a few things im unsure of are:
1. if i buy my first place as investment will it scrap my benefits for First home owner?
2. if i do buy first home owner and convert to investment later wat are the tax implications for negative gearing etc?I work with a few very rich people that have offered to help me out and because they associate with developers etc they have offered me neutural and slighlty positive cash flow propertys in perth that also give you back equity the day you buy the property. they say to me its like buying under the market value, and depending on the property they have to offer, you can get up to $30k in equity straight back from it the day u buy it. one of the other guys i work with just brought into a $700k investment portfolio (using the equity the day you buy it way) in a matter of 2 weeks with only $20k equity in his own house, and pays bugger all to service it (i don't know the actual amount).
ive always had people tell me "things that sound to good to be true, generally are". i would just like some expert or experienced advice as to which path i should maybe head down and some ideas to go about it. i really want to try and cut my income tax as much as i can because i pay about 40% in the dollar.
any ideas would very appreciated, and if anyone in perth would like someone to talk to about property, i'm always keen. i've read most of robert kiyosakis and various other books, aswell as attending the property expos and seminars where i can. im very active about this subject.
thanks all and again… HI!
Hey,
Just wondering so you are working on the mines I am guessing to be making that kind of money?
It would be common sense to just tell you, save the money instead of wasting it on "junk" as you say.
When you have learned how to save then property should be your next goal. Your first goal needs to be learning to save. Especially when you are making that kind of money.Cheers
jezza1 wrote:2. if i do buy first home owner and convert to investment later wat are the tax implications for negative gearing etc?
What not buy something you'd like to live in, keep it as ppor for 6 months then rent it out for the next 6 years and move back in before CGT kicks in ?
.
bacon wrote:Hey,
Just wondering so you are working on the mines I am guessing to be making that kind of money?
It would be common sense to just tell you, save the money instead of wasting it on "junk" as you say.
When you have learned how to save then property should be your next goal. Your first goal needs to be learning to save. Especially when you are making that kind of money.Cheers
Saving is not a problem. I managed to save $35,000 last year to travel europe and asia for 6 months. I agree with your idea on saving being the first thing one must learn, but i came here for guidence in property investing.
That is to do with Property Investing. I won't bother anymore, I can see what you want. Go read some books educate yourself
Your working on the mines clearly? Which is the question I asked.
Spend some time researching / reading
Another option since you spend so much time away, and to still benefit from the FHOG and SD free purchase, is to buy a PPOR and lease a room or two out. This way you get the financial benefits of a PPOR, your house wont be empty for 3 weeks/month – (hopefully if you find a trusted friend or gf they will take care of the place while you are away). This will also provide some additionl income coming in. With the income from leasing rooms out and your high wages you will be able to build up some equity quite fast. Once you have that equity built up look at an IP.
If the 1st place you buy is an IP you will loose FHOG and SD benefits for any purchase of a PPOR later on.
If you purchase the 1st place as a PPOR and then convert to a IP you wont be able to benefit from the interest you pay on the loan as a tax deduction, unless you go through the expensive process of setting up trusts and then paying SD and transfer fees.
By buying a PPOR, building equity then purchasing an IP later this year or next year it will also give you some time to do further research on investment possibilities and follow the market for awhile to get a better feel for trends and opportunities
Just coming in late to the post but cant let advice like this go by unchallenged.
If the 1st place you buy is an IP you will loose FHOG and SD benefits for any purchase of a PPOR later on.
This is totally incorrect. If you purchase an IP and have not previously purchased a PPOR then you will still be able to claim the FHOG when you do purchase a PPOR. Certainly you may loose the SD concessions as a FTB but you WILL NOT LOOSE the $7000 FHOG.
If you purchase the 1st place as a PPOR and then convert to a IP you wont be able to benefit from the interest you pay on the loan as a tax deduction, unless you go through the expensive process of setting up trusts and then paying SD and transfer fees.
Again sorry but this is clearly incorrect again. If you purchase the PPOR as a IO loan and then down the track decide to rent out the property you will be able to claim the interest on the loan as a decuction. You will not have to set up a Trust as the property can be held in your own name and will not incur additional SD or transfer fees.
Moral of the story is by all means read the well being posts but do your DD or talk to a Professional as much of the information kindly provided is incorrect.
Richard Taylor | Australia's leading private lender
gibbo1 wrote:Another option since you spend so much time away, and to still benefit from the FHOG and SD free purchase, is to buy a PPOR and lease a room or two out. This way you get the financial benefits of a PPOR, your house wont be empty for 3 weeks/month – (hopefully if you find a trusted friend or gf they will take care of the place while you are away). This will also provide some additionl income coming in. With the income from leasing rooms out and your high wages you will be able to build up some equity quite fast. Once you have that equity built up look at an IPThanks for the input gibbo, i've actually been told exactly that by a property / finance strategist. He said rent the other available rooms out acquiring income from them and pay no tax, thus creating more equity alot quicker.
Qlds007 wrote:
Again sorry but this is clearly incorrect again. If you purchase the PPOR as a IO loan and then down the track decide to rent out the property you will be able to claim the interest on the loan as a decuction. You will not have to set up a Trust as the property can be held in your own name and will not incur additional SD or transfer fees.So if i buy my own house straight up with a IO loan, say in 1 years time i can then leave the house and turn it into a investment property while still taking full advantage of the tax benifits? including keeping the no stamp duty etc…
So if i buy my own house straight up with a IO loan, say in 1 years time i can then leave the house and turn it into a investment property while still taking full advantage of the tax benifits? including keeping the no stamp duty etc…
YES
Richard Taylor | Australia's leading private lender
Richard,
Thanks for correcting my post
Gibbo
Hey Jezza1, welcome to the forum,
In my opinion and being a young investor myself (27yrs old, with 5 IPs with my fiance and i still rent) I would definitely go the investment property route as opposed to buying a PPOR my reasons are:
1) if you buy and live in the property, it will lower your borrowing capacity for future borrowings(for future IPs) as you are making the full repayments on your own.($350,000 P&I mortgage at 9.58%(commonwealth bank variable rate)=$2963 per month on your own, its not exactly cheap)
2) You receive no tax benefit from it whilst it is your PPOR in regards to your personal income so you will continue to pay 40c in the dollar income tax.
3) You are still young and shouldn't have to sacrifice your lifestyle completely, with an IP the rental income you recieve should cover most and in some cases all of the mortgage repayments (depending on where you buy and how much deposit you put down)
ill get off my soap box now he he he wish you all the best!
hey ten, thanks for the welcoming.
yes thats what ive been thinking about.
This is what ive got in my head atm, can this work… i buy an investment property in a trust under a company structure. i still can claim intrest paid against my income cant I?
Also by buying it in a trust, cause its a standalone enity, does that still mean it qualifies me for my no stamp duty etc?
i'm really wanting to try and hold that no stamp duty claim. but i do know that it may be more benificial to buy and hold an investment property over the long term than worry about the no stamp duty for my PPOR.
I know that buying a IP and renting my own place is probally the best option (as your circumstance ten).
Ive been told by some people to buy my own house, put as much money in it as possible to gain equity and wait for capital growth, then consider a IP.
but i personally think that i can create wealth a lot faster by buying IP's.
Hey Jezza1,
I dont know enough about about trust/company structures to comment, as my fiance and I buy property in our own names. Im sure there are many people on this forum that can answer your questions in regards to trust/company structures ect.
Many people told me to do the same, buy 1 house live in it and sit on it pay it off as quick as you can, I find these people are from our parents generation and were brought up being told all debt is bad ect.
good luck
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