I'm currently in the position where i can buy my first property but am stuck at a crossroad.
I have a young family and is it better to get a family home first and invest in property with what i have left, or do you guys think it is better to just rent a home and invest my funds in real estate now????
I really want my property investing to start now, but just having my first baby my partner thinks that renting a place is just a waste of money. I disagree.
Any feedback would be appreciated.
Cheers
Depends on the figures. If you can rent somewhere cheaper than you would have been paying in interest it may be best to rent.
But also other factors to come into consideration such as not being able to do the same things in your rental as you could in your home. eg paint, pins in the walls!. And you could be asked to move out after the lease expires etc.
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 may be eligible for the first home owners grant
if you live in the house you buy.lstreet,
If it were me (and it isn't) I'd by myself a PPOR and use the FHOG & boost available to you now. I'd do an interest only loan and pay down NONE of the principal. Once you have either saved a bit more or the property has increased sufficiently, I'd draw down some of the equity to use as a deposit on an IP.
Paying off none of your own home's principal, gives you options down the track to convert your PPOR into an IP and still claim the max. of tax deductions on the loan interest.
propertunity wrote:lstreet,If it were me (and it isn't) I'd by myself a PPOR and use the FHOG & boost available to you now. I'd do an interest only loan and pay down NONE of the principal. Once you have either saved a bit more or the property has increased sufficiently, I'd draw down some of the equity to use as a deposit on an IP.
Paying off none of your own home's principal, gives you options down the track to convert your PPOR into an IP and still claim the max. of tax deductions on the loan interest.
hello propertunity, perhaps you can give us some similar advice
I'm looking to save up 15,000 – currently saved 3700 and putting down 1000 a month to save up to get a 280,000 mortgage for a one-bedroom flat (60s type) in toorak. Could i do what you're saying and get an interest only mortgage and then use the offset account plus equity to buy a second one-bedroom flat later on? Does any of this sound doable? Together with my husband we currently have capacity to make a maximum of $3500 monthly payments. We're currently renting at 380/week in South Yarra and tired of renting. It will take me another year to save the 15,000. Also, how long would we have to stay in the first PPOR before purchasing an IP? ON that point, is there any advantage in living in the PPOR beyond the first 6 months, or should we then move into a rental to get the maximum tax benefits (from two IPs). Hope this makes sense! levi
levi5 wrote:hello propertunity, perhaps you can give us some similar advicesure, why not?
levi5 wrote:I'm looking to save up 15,000 – currently saved 3700 and putting down 1000 a month to save up to get a 280,000 mortgage for a one-bedroom flat (60s type) in toorak. Could i do what you're saying and get an interest only mortgage and then use the offset account plus equity to buy a second one-bedroom flat later on?Yes
levi5 wrote:Does any of this sound doable?Yes
levi5 wrote:Together with my husband we currently have capacity to make a maximum of $3500 monthly payments. We're currently renting at 380/week in South Yarra and tired of renting. It will take me another year to save the 15,000. Also, how long would we have to stay in the first PPOR before purchasing an IP?6 months to qualify for the FHOG
levi5 wrote:ON that point, is there any advantage in living in the PPOR beyond the first 6 months, or should we then move into a rental to get the maximum tax benefits (from two IPs). Hope this makes sense! leviOther than the emotional attachment of living in your own home – No. You get wealthy by living as cheaply as you can (might mean renting) and investing and taking max benefit from any freebies (FHOG) and tax concessions (IP).
You must be logged in to reply to this topic. If you don't have an account, you can register here.
