Hi everyone,
I currently have 4 investment properties which I bought independently of each other, i.e I didnt use equity in any to buy the other. Now each has actually built up some equity on their own, whats the best way to utilise this?
Thanks
PropertySeekerHi property seeker
It depends on what your wanting to achieve.
Are you looking to purchase another IP? If so, at what value?
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Jamie,
I guess I would like to buy a house since my PPOR is currently a small unit. However if I sold the IPs I would be hit with CGT, is there a way to avoid selling? or perhaps selling and avoid CGT?
Thanks
PSHi again
Why do you need to sell?
I'm not sure of your borrowing capacity – but if you have sufficient equity, you may be able to use this equity as the deposit/purchasing costs for your new PPOR.
It's important that when tapping into this equity that you set it up as a second loan split (so you can distinguish your deductible debt from the non-deductible).
If you hold onto your PPOR – best to convert it to interest only as soon as possible.
It's difficult to comment further without more info – but hopefully that helps.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
yes, regarding your question about whether to sell or not? if you don't need the extra cash, try not to sell because hopefully over time you will see more growth and continue to get the income from the rent…. – I can see however, that you may need the cash to help buy the house that you want……
regards,Peter
I personally think sell all the IP to cash in is a wise idea.
1) cash is the king at this market condition
2) if you use equity, then you have to pay for the interest which you withdraw from IP, ( so do you have any plan where is income is coming from to cover the interest ?)3) as you can see Steve's Mcknight's book and any of the senimars, he is always encourage to use realised profit then the unreliseaed profit.
4) yes if you sell it will hit your CGT, but it can also flow to your tax return which means when you apply the loan the lender see you have more income and willing to lend you more money. ( please check with the lender, as some of the lenders don't like to take CGT as normal income, some do )
5)if you sell and buy back to the market, you are still in the market so you don't actually lose anything, except you may have more confortable position by using cash to negotiable property price .
as Steve Mcknight's concept you make money you pay tax, that's it don't make it too complicated.
I would rather to pay 10 million tax, which mean I earn 100's miliions of dollar than earning a little and paying no tax.it's just the way i will do it, if i am in your situation.
hope this will help
TaylorHi Jodee,
Before I pass comment I must disclose that I have very little experience in this type of property transaction. In my opinion, you are effectively purchasing a house only (depreciates in value and always need maintenance) and in most instances it is the land that you want as that is the piece of the puzzle that increases in value. I would talk to a solicitor to get the finer points on buying an investment property this way.
Sorry, I can't be of much help.
Kind regards,
Sherry and Jason
Deal Maker | Great Property Deals
http://www.greatpropertydeals.com.au
Email Me | Phone MeYour Private Off Market Property Acquisition Specialist - Forget Buying Through Real Estate Agents
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