How to afford a home and build wealth using property at the same time

Discussion in 'Investment Strategy' started by dpowney, 15th Jan, 2019.

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  1. Angel

    Angel Well-Known Member Premium Member

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    The same people who say to "never sell" are likely to be the same ones who say that "property doubles in value every 7 to ten years".
     
  2. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    Obviously chat to your mortgage broker.

    Old school: From your question, the risk as I see it is that you go too hard at IP's and are left without enough finance to purchase your PPOR.

    Consider purchasing your dream PPOR, and renting it out for a few years. Move in in 3-4 years when you can afford it.

    The first few years of holding a property are always the hardest, so if you can rent it out in this time until things settle, that could work for you.

    Try not to sell your current IP. It's not easy to get in and out of property, and you're not really supposed to.

    Property does wonderful things in the long term, but it actually spurts higher in a cluster of just a few years, and goes sideways for most of the time. So try to hang on and focus on purchasing that PPOR.

    It's okay to put the "big rocks in the jar" first.
     
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  3. dpowney

    dpowney Member

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    I had not considered this option. Thank you.
     
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  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    no advice

    but WHY ?


    when there are possibly other methods ?

    ta

    rolf
     
  5. San2018

    San2018 Well-Known Member

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    Not to confuse Op but someone told me this afternoon that i'll lose the benefit of CGT waive off if i rent initially and this benefit out weights the negetaive gearing benefit which we get in first few years. You might argue thag we never sell PPOR but things/ circumstances/priorities change and you might sell in 15 years?

    And also think about land tax if you hold two IPs in same state.

    BTW, i am in the same boat but in Sydney.
     
  6. Fargo

    Fargo Well-Known Member

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    This is even a more ridiculous statement ! One glove doesn't fit all ! I think I understand property cycles I considered selling last year , but it would have been a stupid thing to do. For a start like many I wouldn't qualify for another loan , and have no money and no house, secondly it would be stupid to buy in the same place with the crap yields and high fees, and ridiculous land tax etc, the equity could be used to buy a cheap positive cash flow property, instead of going to pay CG Tax. Thirdly not all properties have fallen substantial. The last time I looked a few months ago an identical property had fallen about .01%.
     
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  7. albanga

    albanga Well-Known Member

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    I meant to write “could” instead of “would”.

    But come on mate! Surely your smart enough to understand the point of the post.....

    OP said “never sell” and that’s just nonsense as my post was trying to highlight that you could technically make a gain in 1 year in current market cycle.
     
    Last edited: 21st Jan, 2019
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  8. Terry_w

    Terry_w Broker, Lawyer, Tax advisor, Debt Recycle advisor Business Member

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    What is a CGT waive off? And was the person who told you licenced?

    If you mean renting out initially will mean CGT will apply, this statement may, at best, be only half true.
    Tax Tip 86: Don’t be so fearful of generating income from the main residence Tax Tip 86: Don’t be so fearful of generating income from the main residence
     
  9. San2018

    San2018 Well-Known Member

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    Sorry, i mean renting out initially mean CGT will apply. Thanks for clarification on this. I was not aware this tip before.
     
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  10. craigc

    craigc Well-Known Member

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    From OP limited facts given it looks as though if sold could potentially be CGT free using 6 year absence rule if it is sold.
    Moved out 2013/4 and renting with no other properties.Doesn’t mention if wife has properties or other facts but would appear this is possible.

    Check with your professional for all facts & eligibility.
     
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