buy, move in, renovate, sell/hold strategy

Hi guys,

Interested to hear from people who have ever performed the buy, move in, renovate, sell/hold strategy.

How successful have you been? What should we be wary of? Best approach tax wise? sell v hold?

My reasons for considering this strategy involve:
- My partner and I are both young and arent looking to purchase a family home yet
- I'm good on tools and would perform the majority of the renovations
- By living in the house we would keep holding costs at a minimum and not need to rush the process
- Possibly make use of FHOG stamp duty waiver (<430k in WA unlikely however)
- If succesful would look to move into next property and repeat
- Faster way to grow portfolio by manufacturing growth

 

Defs hold.
Check the cgt tax mumbo jumbo what's best.

One problem with living in the place is be sure to remember it's an ip, so don't go for the flashier gear to make it nicer because you're living in it. Get in, get out! Have a plan and be cost effective. Otherwise look at renting them treat it as a "job" go there and smash it out when you can

 

You sound like me when I ask my wife how X strategy will impact our tax situation which then starts her mouthing off in detail.. and I say stooooop! Just tell me yay or nay or which way!

 

Great idea

There is a young couple on this forum who are clients of mine who do exactly that (no idea what their online avatar names are however).

They do amazing transformations in renovations and it's really funny because they usually mention that they get it exactly how they want and then put it on the market for rent. They have managed a property per year for last 3-4 years doing it this way.

May not work as well with children and school commitments, so best time to give this a go is now.

 

I buy/reno/hold my properties. Am in much the same situation as you. In my late 20's and do most of the work myself.

It is a good way to build up your portfolio while you are young and able, you are basically making your own money (equity).

Some of my recent examples.
2013 120k equity from a 30k reno over 18 months
2014 50k equity from a 7k reno in 12 months
2015 40k equity from a 10k reno still going as have only owned it 9 months will be about a 20k reno when done and hopefully around 80k equity when complete.

I've hit a wall with APRA. I'm probably one of those people who wouldn't meet serviceability for what I already have. So next plan is to throw a granny flat on and boost up the cash flow.

 

If you sell to do it again, I believe you can only do it maybe a couple of times before the ATO starts looking at you and you will have to pay tax of some description on the profits, not sure about the details, I'd be consulting an accountant specialising in property.

 

Yeah this is kind of my strategy too but I take a lot longer to do my renos. The first place took 4 years (was really nice when I left ) and I'm in the middle of a renovation now too. Will be moving in soon and will save heaps by doing so. It was too disgusting to move into initially but then so was the first one - difference is that I could afford to not move into the mess this time.
Bought another one which I haven't lived in nor reno'd and it's cost me the most and been the most trouble too. Live in and reno definitely suits me.
You will get sick of living in all the dust though. Try to get dusty things out of the way asap. Might want to store some stuff for a while?
Don't know about tax - I suppose you won't get as many benefits but are you earning mega-bucks? If so, you may not have the time nor temperament for on-going renos.