Strategy for next PPOR

Hi,

We’re evaluating options to buy a new PPOR house.

Currently situation we each own a PPOR property. (1) house with valuation of 900k, mortgage balance (as redraw) 170k. (2) townhouse with valuation of 700k, mortgage 240k.

Ideally would like to keep both properties and rent them out but after advice on the best strategy borrowing wise, and tax wise to achieve this?
We do have savings to enable a purchase of up to 1.6m not utilising equity. We’re wondering is there a way we could use equity from our existing properties to unlock more money to afford say 2m new PPOR. Open to opinions how to best structure moving forward.

Alternatively any recommendation of who to talk to in Brisbane about this?

 

You need a mortgage broker.

but if you refinance to borrow against equity to buy more ppor, none of the additional interest will be deductible.

 

Have you spoken to a broker yet? You'll be able to use projected rental income from both properties for servicing, but the low balances on your current homes will mean that you won't have many deductions - not the end of the world, but you'll pay more tax on the rental income which is a bit of a bummer.

It might be worth selling one, using the cash to buy the new PPOR and then using equity to buy a new INV. But get your borrowing capacity checked - that's the first step.

 

Thanks for your responses. We have now seen a mortgage broker - can borrow up to ~1M for a new PPOR whilst keeping both existing properties.
The 1M loan plus savings would allow us to purchase a new PPOR in the price range we were hoping (just!). However 1M non-deductible debt seems quite a lot, combined with not many deductions/paying taxes on the IP’s as they would essentially both be positively geared.

Trying to weigh up if it’s better to keep both properties still, or sell one and use that cash toward a new PPOR then buy another IP later? If so, which property to sell?

We are trying to think long term, we’re in our early 40’s so ideally want to retire at 60 and sell off assets then to retire.

 

Personally, if I can buy I will sell the townhouse as condition of settling a new ppor. Keeping the other ppor will be a question on location and potential if you can find a better one (usually not taking into account the selling cost and new purchasing cost)