hi folks. My situation is that I have a large home which I want to move out of in order to downsize and retire in 5-7 years. It has been valued at 650-680000. I want to buy in the same area a smaller home around the 500000 price bracket. I only owe 70000 on my house. Then I would like to purchase an investment property in another town which I would like to eventually retire to, can buy for 300,000. I would then want to keep the smaller house as my son will be living in it. My question is should I sell my house to finance the new houses or rent it out and use the rental income to help pay the new loan? My income is only about 70000 a year before tax. Thanks
How long have you owned your PPOR? If pre 1985 it should always be cgt free (barring title owner changes) a factor to consider as you can then buy another PPOR and retain two cgt free properties. Marg
Only issue I've ever had renting out a PPOR was one that we as a family had put allot of love in, special memories with kids when young, great lawns and gardens, sentimental etc, etc, only to see it run down, not cared for similarly 12mths later, was disappointing/frustrating. If that kind of thing doesn't bother you and everything else stacks up...
If uou can afford both And downsizing now, to only let your son live in it...... Is it possible to use your equity to buy now in his name ? Thus saving on stamp and transfer duties late ??? This would mean you could claim the 6 year absent rule on current ppor, and sell to buy the country house when it suits you.
Yes I believe so as I have no other debt and my partner will be moving in with me which would bring in another 4000.00 income per month. I am also looking at maybe purchasing a house which I love that got passed in yesterday at auction. But I haven't got finance in place yet. Could I get a bridging loan and then sell current house? Current house I was quoted worth 650-680,000 Loan remaining is 70,000 House I would like to buy passed in at 520,000. I have 20,000 cash Thanks so much
If u can afford both do you think the old house will grow in value more than the interest you will have to pay on the loan. For the new house?
No I don't think it would. That's why I'm thinking now I would have to sell. What amount do you think the banks would lend me to buy the new place or should I just give up and find something cheaper
I think you should be able to buy the other two with that income plus 2 new rental incomes. Pick a broker and get them to start doing checks. You probably do not need to sell anything.
If you're retiring in 5-7 yrs, double check you can get the finance.. The banks tighten up as you get older. And to your question on holding or selling - I would say if you can sleep at night holding both, then go for it (maximising debt position on the rental prop of course). 95% of the time it's going to be in your best interest to hold on instead of selling and keep building up that retirement nest egg.. not long to go now! #jealous
