Forums / Property Investing / General Property / New investor in Inner west, Sydney

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  • Profile photo of RamRam
    Participant
    @therealram
    Join Date: 2009
    Post Count: 15

    I recently invested in my first IP in Homebush West – Inner West Sydney.

    The property is brand new so I received the full grant.

    2 bedrooms, 2 bathrooms, large storage room next to undercover parking

    Purchase Price: $340,000

    FHOG: $24,000

    Rent potential: 380 – 400 p/w (let me know if I’m wrong)

    Has anyone else invested in this area, or surrounding areas?

    Profile photo of TheEverydayTraderTheEverydayTrader
    Member
    @theeverydaytrader
    Join Date: 2009
    Post Count: 1

    Your figures look good to me.

    Profile photo of sydney08sydney08
    Member
    @sydney08
    Join Date: 2008
    Post Count: 8

    Hi Rambo,

    Happy New year!

    Yes, your numbers look right, though my partner was able to negotiate rent at about $415-$430, same area…

    Amit: please email me your email address and a contact number so that I can add you to the list, as I haven't come up with the next dates this year, its been pretty busy for me, moving house, a baby on the way, etc, etc, but I will definitely keep you uptodate with next meeting dates.

    my email is [email protected]

    Cheers!

    Anna

    Profile photo of aurorauror
    Participant
    @auror
    Join Date: 2009
    Post Count: 6

    I've looked at homebush west but was put off by the large numbers of units in the area – might make it hard to sell as there's generally lots of others selling at the same time.

    you need to live in it for 6 months to claim the FHOG, but when you turn it into an IP make sure you get a depreciation schedule done to maximise cashflow.

    Profile photo of RamRam
    Participant
    @therealram
    Join Date: 2009
    Post Count: 15

    Sorry if this sounds stupid, but what is a depreciation schedule, and who normally goes through it?

    What's a rough figure I can claim back? I heard it was around 5k, for the property I'm purchasing.

    My unit block has around 25 units and all sold in 2 weeks. However, I hope I made the right decision to buy here. I’ve been looking at the rental value, and it seems to be renting quickly – around 380-400 p/w.

    Profile photo of aurorauror
    Participant
    @auror
    Join Date: 2009
    Post Count: 6

    these guys are pretty good:
    http://depreciator.com.au

    the exact figure will vary so I don't know how much you can claim through your IP. but you can try the online schedule here:

    are you going to rent yours out immediately or live in it for 6 months?

    Profile photo of RamRam
    Participant
    @therealram
    Join Date: 2009
    Post Count: 15

    Live in it for 6 months. Rather live in it when it brand new!

    Do you think its better to rent out first, as I can claim this FY?

    Profile photo of Edvico_kvnEdvico_kvn
    Member
    @edvico_kvn
    Join Date: 2008
    Post Count: 46

    Rambo,

    Renting it out in the first 6 months would be a big mistake!

    1.  You will breach the rules of the FHOG and could be asked to cough up the $24k back if you are unlucky enough to be audited.

    2.  You will lose the eligibility for the 6 year CGT main residence absence rule (and have to end up paying CGT when you eventually sell the IP). 

    The extra cashflow for the first 6 months may be tempting but better to live in it to establish it as your main residence first, before renting it out.

    Feel free to email me if you want a copy of my article on the 6 year rule mentioned above.

    Profile photo of RamRam
    Participant
    @therealram
    Join Date: 2009
    Post Count: 15

    Thanks for the advice Kevin. Appreciate it.

    However, I was under the assumption that I would have to reside at the property within the first 12 months. So I could rent for say 8 months and reside after that period (before it reaches 12 months).

    Also, it would be great if you can let me know if I require a 'depreciation schedule', or if an accountant can take care of calculations.

    Profile photo of wealth4life.comwealth4life.com
    Member
    @wealth4life.com
    Join Date: 2003
    Post Count: 1,258

    Hi Rambo … don't assume and take good advise,

    Your property looks great … work hard and invest as much as you can into the mortgage to reduce debt which will increase yr cash flow when u move out after 6 months … hint!!!

    D …

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