Hi All.
Have spent time reading the forum threads (mainly IP to PPOR related) and have learnt a lot already.
Would like "your two cents" on what you would do in my situation.
I only have one IP (it's in Melbourne) and I have never lived there. I have always rented elsewhere.
The IP has been rented out since settlement in 2005 and the current lease ends in the next couple of months.
I now intend to move back to Melbourne and into my IP as I currently have no job and am living off savings.
The loan (standard variable principal and interest loan) balance is 250K and I have 100K in redraw. The current value of the IP would be in the order of 800K-900K (my estimate based on comparables).
The rent from the IP almost covers (80%) the minimum required loan reapyment. However I have always and continue to repay almost double the minimum requirement. I currently use redraw funds to cover the difference between the rent and the amount I choose to repay.
The main things I ask myself are
1. should I move in to my IP so I don't pay rent elsewhere when I have no job?
2. should I switch the loan to interest only and pay the minimum until I get a job?
3. I understand that the CGT upon resale will be apportioned on a time basis between IP and PPOR status but what else should I know given I expect to hold this IP for the long term (say another 20 yrs)?
4. should I move in to the IP and then move out when I get a job and can then pay rent elsewhere and put tennats back in to the IP?
5. am I doing a dumb thing by continuing to pay more than the minimum loan repayment using redraw funds?I do expect to get a job relatively soon (within 3 months) and have typically had an annual income of 100K-150K.
I have no dependents.
What do you guys think? What would you do?
Have I given enough info?
Thanks for your time reading this…..I hope it makes sense
RZ
you better move into your IP , and if you are alone , you better have rented some portion or the second way is to have a paying guest , it will also fulfill some of your needs .
No idea the condition of your IP but moving in while you have no job could be a good idea to give the place a bit of a touch up with all your spare time.
Thanks for the quick replies. Always nice to know someone is out there.
I haven't even thought of renting out the 2nd room……..pretty obvious to some I guess but after years of single living common sense becomes less common. Definitely the easiest way to reduce costs.
The place is a little tired after 5 years of being rented out so will definitely try to turn my not so handy hands to simple touch up stuff.
If I understand things right I could still benefit from the six year rule even if I move into it now and use it for a PPOR but sell it within 6 yrs of original settlement. I have not had any PPOR to date. Is my understanding right?
Not that I'm thinking off selling but nice to know all the options.
RZ
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