Advice - Just bought IP and renting

Hi Forum,

Introduction for myself:

in my mid 20s,
86k pa income
200k in savings
renting $375 per fn

I have just bought myself an IP in QLD and it occured to me that what if i bought a cheap apartment in NSW first and then an IP in QLD a couple days later. That way i can utilise the FHBA and escape stamp duty in NSW.

I dont want to be renting forever as I see it as dead money where I can pay down P+I in my ppor.

IP was for 450k in QLD and I believe i just have enough borrowing capacity for a 550k apartment and 450k IP if i used my savings to paydown as deposit.

Feeling alot regret as i only bought the IP a few days ago!

 

Rentvesting is not a bad strategy either. You remain eligible for FHB benefits still until you buy a place to live in.

 

Say what??

So if I buy a place and don’t live in it, you’re saying that FHB grant and other benefits can still be cashed in when you do buy your first place to live in… I thought the condition was if you didn’t own any property, only then you can benefit from FHB. Please correct me if I’m wrong. I’d be very happy to be wrong in this instance.

 

If you don’t live in then the purchase made is for investment purpose, thus FHB benefits can’t be claimed for investment properties.

You should be happy then

I don’t believe that is correct. Which state are you having your investment/s in.

 

Don’t own any IP yet. Currently undecided as to the location that first IP will be purchased.


To be eligible for the grant:

• You must be at least 18 years of age.
• You must be an Australian citizen or permanent resident (or applying with someone who is).
• You or your spouse must not have previously owned property in Australia that you lived in.
• You must be buying or building a brand new home.
• The value of the new home including the land is less than $750,000.
• You must intend to move into the new home as your principal place of residence within 1 year of the completed transaction and live there continuously for 6 months.

This guide explains how and when to apply for the first home owner grant, the documents you need to include when applying and your obligations after receiving the grant.

Just double checked and it’s there in black and white. I’ve been a member of this forum for 30 mins or so and what a great lesson to learn!

 

Welcome!

Just imagine how much you will learn in the next few months!!!

 

Unfortunately for the OP it seems NSW doesn't allow it like QLD does.

 

Buyers remorse? It's a common thing.

Could you buy a property in NSW for $550K and settle before the QLD IP does?
Would save you about $20K in Stamp duty but I wouldn't rush out to buy 'something/anything' just to get that savings personally.

 

Stamp duty 'savings' may not be good proposition long term if its poorer asset. For example, 1% p.a better growth on a more expensive/existing property e.g. $1M(which not eligible for stamp duty concession), is like 20k+ better off after just 2 years.

Though understandable if stamp duty savings is the only way someone who is low on savings, can get into the market.

 

Or if they are limited in borrowing capacity, which OP thinks they are.