Hi All,
After buying our property for 3 years we have finally paid it off. Hurray!!
*we were lucky to structure our loans properly after reading it off a forum like this one back then. 80% loan with a 100% offset account.
Need advise on what we should do now based on our situation.
we are in our late 20s / just turned 30 this year. My Mrs is getting the baby fever so we are looking at buying a bigger place. Anyway to cut the long story short below are our "situation"
Bought a place which is our PPOR for around 520K in 2010. This involves getting a loan from the bank at 80% (416K) and taking out a loan from my parents 100K.
Refinanced it in 2012 with a valuation@ 610K thus our 80% loan is now 488K.
So at this present moment we have 488K sitting in the offset account.
we are looking at a place that is asking for 840K and i think it rents out for 750/week (does that sound alright to you?).
We are located in Sydney (Auburn) not too sure if this area will appreciate in the future.
Which option will you take?
Option A
We sell our current place and move into the new place
Pros: low debt level, actually getting the capital gains tax free since its PPOR
Cons: lost of an opportunity to have an investment property
Option B
We move across to the new property and rent out our property @600/week.
This means we will convert our PPOR to an IP = getting someone to value the house to get a cost base for future CGT and for depreciation.
Question: from what we understand since we took a loan from my parents (*got bank transfers and a signed paperwork to prove)we can actually return that extra $72K that we got from the refinance to them and -ve gear the whole 488K?
Pros: we now have an investment property that might be CF+
Cons: we are unable to tap on the capital gains we got to reduce debt of PPOR. Higher PPOR debt.
Option C
We keep staying in our current place until we get a baby then move over to the new property. In the mean time we will keep that as an IP.
Pros: we will be able to depreciate the new property.
Cons: The property is currently in really good condition and tenants will probably destroy it.
we had people telling us its best to buy and sell on the same market and that its "safer".
Some has also suggested for us to wait. But obviously we didnt listen to them in 2010.
I feel the sydney area is kind of real hot at the moment but as a novice we are not sure if what we are seeing is an overshot where the market will correct itself or if this is the start of a steady growth.
Thanks in advance guys!
Cheers!
After buying our property for 3 years we have finally paid it off. Hurray!!
*we were lucky to structure our loans properly after reading it off a forum like this one back then. 80% loan with a 100% offset account.
Need advise on what we should do now based on our situation.
we are in our late 20s / just turned 30 this year. My Mrs is getting the baby fever so we are looking at buying a bigger place. Anyway to cut the long story short below are our "situation"
Bought a place which is our PPOR for around 520K in 2010. This involves getting a loan from the bank at 80% (416K) and taking out a loan from my parents 100K.
Refinanced it in 2012 with a valuation@ 610K thus our 80% loan is now 488K.
So at this present moment we have 488K sitting in the offset account.
we are looking at a place that is asking for 840K and i think it rents out for 750/week (does that sound alright to you?).
We are located in Sydney (Auburn) not too sure if this area will appreciate in the future.
Which option will you take?
Option A
We sell our current place and move into the new place
Pros: low debt level, actually getting the capital gains tax free since its PPOR
Cons: lost of an opportunity to have an investment property
Option B
We move across to the new property and rent out our property @600/week.
This means we will convert our PPOR to an IP = getting someone to value the house to get a cost base for future CGT and for depreciation.
Question: from what we understand since we took a loan from my parents (*got bank transfers and a signed paperwork to prove)we can actually return that extra $72K that we got from the refinance to them and -ve gear the whole 488K?
Pros: we now have an investment property that might be CF+
Cons: we are unable to tap on the capital gains we got to reduce debt of PPOR. Higher PPOR debt.
Option C
We keep staying in our current place until we get a baby then move over to the new property. In the mean time we will keep that as an IP.
Pros: we will be able to depreciate the new property.
Cons: The property is currently in really good condition and tenants will probably destroy it.
we had people telling us its best to buy and sell on the same market and that its "safer".
Some has also suggested for us to wait. But obviously we didnt listen to them in 2010.
I feel the sydney area is kind of real hot at the moment but as a novice we are not sure if what we are seeing is an overshot where the market will correct itself or if this is the start of a steady growth.
Thanks in advance guys!
Cheers!