Luke BMember@luke-bJoin Date: 2012Post Count: 10
Doing an assessment of the value of my house I’ve discovered that (based on rental prices of similar nearby properties) if I rented it out, the rent payments would more than cover the mortgage payments. I bough pretty smart (aka:lucky) on the house 4 years ago, and it’s worth much more($250k) than what I bought it for.
What sort of options do I have here?
I was thinking I’d rent it out and buy another property as my PPOR, or should I consider renting somewhere cheap(ish) and pay off the existing debt quicker?maree_bradrossMember@maree_bradrossJoin Date: 2007Post Count: 401
good going – how about using the equity to use as a deposit on an IP?bear09Participant@bear09Join Date: 2007Post Count: 5
Hi Luke B.
I am no property investor but I am looming large for starting off….
I am in roughly the same boat as you. Essentially the interest payments on my home are $800 per month. Going by other rental in the area I could expect $330 a week which would mean CF+ if we moved out and rented out.
Im interested to see any responses on this topic.
I feel as though if we moved out and rented it out that would be a good start to a CF+ portfolio (by that I mean good equity and + cashflow) but – My wife and 3 kids need somewhere to live. I figure that if we rented then this would offset any +CF gains basically rendering the process useless.
If we bought another place the mortgage would be bigger.
Im a newbi, a novice – I dont know much at all.
I think what I will do is stay put and branch from here. Ideally Id like to get my living expenses down as much as possible and then somehow bring in some passive income to buy myself some more time in life. This is obviously the standard normal approach that so many speak of and dream of yet it seems few actually do. If success comes from doing things differently then perhaps this is bad option.
Anyhow long story short Id be keen to see what others have done when in this situation.TerrywParticipant@terrywJoin Date: 2001Post Count: 16,190
You would then be paying tax on the rent if you moved out and having to also pay rent yourself. If you bought another PPOR then the loan would be larger and it would cost you more because your cash is probably tied up in the old PPOR. It may work out better if you could rent at a much cheaper price and to pay the extra tax, but this would mean the hassle of moving out. But you could retain the property CGT for up to 6 years of renting it.buildhotpropertyParticipant@buildhotpropertyJoin Date: 2012Post Count: 1
if you re sell later it could cost you tax??? to convert it to an investment property loss of principle res status ???? having one good tax free home is a foundation
you could rent rooms i think this can be t — free ,, second home is the go as you done it well with the first one , why not repeat the process — mining area positive return properties can take you forward