Thoughts on my strategy

Discussion in 'Investment Strategy' started by Shanny, 26th Jun, 2020.

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  1. Shanny

    Shanny Member

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    My partner and I are currently rentvesting. We own a positively geared house in Adelaide which has lost a little bit of value. (I am 25, $90k salary, partner 30, $80k salary)

    What do you think of the below strategy.

    We don't know where we want to live long term. Usually change jobs every 2 years within the same field

    Buy a PPOR in western sydney (blacktown). Something with the potential for a granny flat down the track. Live in it for around 2 years. Do a small renovation (not sure what this means in terms of tax yet). Save for the next house in an offset account, potentially do a small reno. Then move out and rent out the property. We would then continue rentvesting, but have the benefit of the CGT exemption. Purchasing the next property when we can and then come back to add the granny flat when we need to increase cash flow. Welcome your thoughts/questions
     
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    What sort of deposit value and savings rate do u have pls ?

    ta
    rolf
     
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Not a bad strategy as the main residence is the only tax free asset you will ever get.

    instead of using a deposit can you borrow against the existing property?
     
  4. Shanny

    Shanny Member

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    Currently have $70k saved, plus $40k in redraw. Current savings rate of 40%
     
  5. Shanny

    Shanny Member

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    Not sure yet. Meeting with a broker soom. Originally purcahsed the property for $350k, online valuation now at $325k. Originally paid a 20% deposit and we have $40k in offset. Would need to inject more money if we were to refinance and maintain not paying LMI on it
     
  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    In that case it might be better to stay put for a while.
     
  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Sounds like you may benefit from a Valuer shop ?

    ta
    rolf
     
    Terry_w likes this.