Hi
I'd like to hear any thoughts on the following please if anyone would like to share.
i have 2 options for renovating as I see it: a) pay for the reno piecemeal as I can afford it, roughly $500-1000 pm which will mean the reno will likely take 12-18 months plus or 2) get a personal loan for $10k, sit it in an offset account, blitz the reno in 2-3 months and flip the property once past the 6 month CGT period.
it's my ppor and there is no equity.
can anyone see any other options or give me the pros and cons as they see them?
Thanks,
Tom.
How do you know there is no equity?
If you are working to a timeframe and need the surplus funds then borrow if not do it piecemeal.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
If it were me I'd borrow it and get it all done. Renovating slowly rarely works out well!
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]
Isn’t this a reno/flip project in Wanneroo? With no equity at present then buy and hold over 18 months while you reno will kill the financials on this deal. Time is everything. You need to be ready to flip at 6 months at the latest.
Not sure who the loan is with but knowing you wanted to renovate the property from day 1 i would have incorporated a reno line of credit with the original application.
We do more and more of this sort of funding and can often help especially when it is a high lvr from day 1.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I don't understand the 6 month CGT point. You've bought it? are buying it? Are you living in it while renovating?
If it's a PPOR there is no CGT period. If it's not it's 12 months from purchase to get the 50% discount.
What sort of reno are you doing for $10K that will take 2-3 months?
Hi Catalyst
I am assuming Tommy is referring to his Stamp Duty or FHOG which depending on the State where he has located may require him to occupy for a continual period of 6 months in
the first 12 months
Assume he knows there is no CGT on a PPOR and is getting confused.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi
Yes, you're all correct and I was thinking about the FHOG not CGT.
I don't think this bank would have been very accommodating for an LOC. it's been a mission as is because I think they double as the brokers for one of the second tier banks and then throw in their own cash on top.
The reno will be lipstick and bubbles. Upgrade the kitchen and bathroom, new paint job, landscaping, end of discussion.
It's settled then; I'll begin a loan application in the coming days. Is a broker a good idea for a personal loan or should I just go straight to a major?
Cheers everyone,
Tom.
Hi Tom
If you go thru a Broker they are probably going to want to charge you a Brokerage fee as there is no money in personal lending.
Try and find a smaller credit union or smaller bank as they may be more accomadating than one of the big 4.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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