PPOR v Rentvesting strategy

Hi all. I was hoping to get some opinions on selling property to free up cash to buy PPOR v rentvesting. Current properties are:

IP #1 - House - Orange, NSW
IP #2 - House - Toowoomba, QLD
IP #3 - Unit - Logan, QLD
Current PPOR - Unit - Brisbane North

I've always wanted to live in a house rather than a unit so looking at moving out of my current PPOR in the next couple of years. I do like the idea of rentvesting, then I can keep all 4 properties as investments. But also like the idea of owning my own place. Thoughts?

 

Could you do a bit of both?

Buy the new home now, but rent it out for 6 years. Rent yourself during this time.
Sell the current PPOR CGT free in 6 years after some more growth kicks in (if you think this will happen).

 

The possibility of the abolition of the 6 year absence rule under a new government shouldnt be ignored. You could end up without a CGT free property. If the main residence absence rule was abolished it could have a retrospective effect. - Not a law that would need to have a grandfathered application.

 

The possibility of it being abolished by the current government should also not be ignored.

Legislative change is a risk that needs to be considered with every transaction, especially big ones such as property ownership.

 

Pretty accurate video on youtube.
Canada based, however very relevant to Australia.

Can extrapolate the pros and cons to rentvesting.

 

Have a look at some of my other posts on this matter.
Strategy for growing family - stop rentvesting

Is rentvesting good for long term?

Another point to make, is that one's IP portfolio should be "emotionally neutral and separate" to their PPOR. The IPs are just an end to a means, whereas a PPOR is one's abode (one's home). Hence, you can only have one PPOR and the PPOR generally should always move with you. That is, one generally shouldn't consider their PPOR as an IP.

When it's time for a new PPOR, you should sell the existing one, and then move-up and onto the next PPOR. The PPOR moves with you. You buy and sell your PPOR as your situation prevails. The IPs standalone.

Hence, in this case, if you want a house, sell your existing PPOR (unit) and move onto a House.

 

If he buys the new home and rents it for 6 years wouldn't it still be a cgt liability? Wouldn't one have to live in it for a year and then rent it out?

 

yes it would need to be the main residence first, but no need to live in it for a year.