Hi guys, first time poster go easy! Needing some guidance on some strategies. The run down - 32 & 33 2 dependants First House purchased 2017- 375k tasmania valued 500k+. Has been rented for 2.5 years at $500 p.w. Purchased 2nd property 2018 current Ppor $388k currently valued at 550k but could also rent for $500 p.w. We've purchased another property in hobart on interest only for 350k mid 2020. renting for $500 p.w valued at 600k My questions are. We want to upgrade to the ppor But how do we do that? Should we sell current place PPOR to free up cash and place profits on new house. Or use the equity from combined above props to purchase the newest PPOR house? New house approx 700k We both have good incomes and have 150k deposit ready to go as it is. Not looking for diversity just yet. Cheers Jared b
Depends on your cashflow I suppose, your 2 investments seems like it's a positive geared property. Your current PPOR seems like its also positive once turned into and INV. If all 3 properties can contribute in paying down your new PPOR faster and servicability is no problem then why not keep all of them? Note, you will draw equity of of your current property to Fund the deposit of your PPOR of you dont want to use your own cash. Or you can draw out the initial deposit you placed in invest 1 and 3 (assuming you used cash) which you can potentially increase those investment loan back up for tax deductions and use the equity drawout for your new PPoR.
If you can do it , buy the new PPOR now and hold on for a while , while Hobart keeps going up . I had a look at the stock on market in Hobart ( sqm free property data ) and it’s in a steep decline which to me strongly suggests hobarts still got more petrol in the tank . Melbourne and Sydney don’t show the same strength at the moment . You need to watch what you’re doing with nominating one as your PPOR as there would be possible CGT implications , but there might be a period where you can hold both . Not sure though . we’ve just sold in Claremont , and would have liked to have held for longer , but need the money for a development . Cliff
Two scenarios really and please tell me if I'm way off. Scenario 1. We keep all three. Convert current PPOR into a IP pull the equity from it. And the equity from both other IP's to purchase our newest PPOR and with the remainder of the positive cash flow from ip 1,2 &3 rents dump it into the new PPOR to pay down faster all the while not using any, if any of our own capital. How do we achieve max borrowings against IP's to get full effects tax, etc. Split loans? Off set? Should they all be interest only as only one IP is currently? Scenario 2. Sell current ppor in this hot market estimated 250 - 275k profit on sale. Placing above profit into newest house 700k & borrowing the equity from remainder of ip's leaving us with a relatively low loan on new ppor and still ending up in the same current situation 3 houses.
