Forums / Property Investing / Help Needed! / help with either first ppor or ip

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Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of anhieanhie
    Participant
    @anhie
    Join Date: 2011
    Post Count: 9

    hi

    i am so thankful i stumble on this forum, as a potential property owner i learnt alot of  what to do and don't do.
    any advice would be greatly appreciated.
    i'm looking to buy my first property. i have about 70-75k saved up.
    i like to know whats my best course of action. To either buy as ppor to ip or ip.
    i won't be living there only i need to claim fhog.
    what i understand so far
    get home loan with interest only repayments with offset account
    put any extra money onto offset account (reduce interest payable and to fund new investment/project in the future)
    as ip home i won't be eligible for fhog? but use ip to reduce my taxable income. neg gear

    therefore should i buy as ppor, claim fhog than turn to ip later or just go ip. i understand i will need to live there at least 6 months to get fhog.
    i wrote this down somewhere but don't understand CGT exempt main residence exemption for up to 6 years
    i understand if the property use as ip when i sell i am liable for cgt
    again any help would be most helpful

    anh

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Yep, you're grasping the concepts very well!!!  Great stuff!

    If you buy and live in, yes you'd be eligible for FHOG (assuming you fit all the other eligibility criteria).
    You could then rent it out if you wish.
    IF you intended to sell it, you'd want to move back in before it had been an IP for 6 years in order to be CGT exempt.  This is only true if while rentig it as am IP you hadn't bought another place and resided in it.

    You realise of course you don't have to sell the place.  Wait for it too go up in value and use the equity as a deposit on a 2nd property.  This way you are realising your gain to build further wealth, without inflicting upon youself selling costs (agent fee normally around 2%; and solicitor fees) and CGT.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of BluegrassBluegrass
    Participant
    @bluegrass
    Join Date: 2009
    Post Count: 73

    Hi anhie
    Get a good finance investment finance person to give you the right advice.
    There are a couple on this forum, but there are others.
    What part of the country are you in?
    Bluegrass

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    anhie wrote:
    hi

    i am so thankful i stumble on this forum, as a potential property owner i learnt alot of  what to do and don't do.
    any advice would be greatly appreciated.
    i'm looking to buy my first property. i have about 70-75k saved up.
    i like to know whats my best course of action. To either buy as ppor to ip or ip.
    i won't be living there only i need to claim fhog.
    what i understand so far
    get home loan with interest only repayments with offset account
    put any extra money onto offset account (reduce interest payable and to fund new investment/project in the future)
    as ip home i won't be eligible for fhog? but use ip to reduce my taxable income. neg gear

    therefore should i buy as ppor, claim fhog than turn to ip later or just go ip. i understand i will need to live there at least 6 months to get fhog.
    i wrote this down somewhere but don't understand CGT exempt main residence exemption for up to 6 years
    i understand if the property use as ip when i sell i am liable for cgt
    again any help would be most helpful

    anh

    Hi Anh

    Welcome to the forum.

    It looks like you’ve answered your own questions :)

    As you’ve alluded to – if you do decide to live in this property and then turn it into an IP later, you would be best off taking out an interest only loan with offset.

    I’m not sure if you’ve put much thought into your first property but if you can find something that you can add value to (especially with simple, cosmetic renos) then you’re onto a winner. I strongly believe that these properties are ideal when starting out. Instead of waiting for the property to go up in value (so you can buy the next) you can add value to it (and purchase the next property sooner).

    Best of luck

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of anhieanhie
    Participant
    @anhie
    Join Date: 2011
    Post Count: 9

    hi

    bluegrass im from melbourne
    never thought i would be considering buying a house if you had ask me this time last year. in debt with a girlfriend =(; i wonder why
    however things turned bad, put myself together and worked my ass off. i mean doing like 11- 13 hours days. thank goodness for overtime and extra work. paid all off except car loan =(
    originally i want to buy property to reduce my taxable income, as seeing everyone else has a larger tax return. but now i have goals i thought never would be possible
    anyway thanks for listening =)

    anh

    Profile photo of BluegrassBluegrass
    Participant
    @bluegrass
    Join Date: 2009
    Post Count: 73

    Hi again anhie
    We just put a lady into an Investment and see is earning 45,000 gross with a property worth 329,000.
    Anything is possible if you try.
    Well done, keep you mind open and away from seminars!
    Bluegrass

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