W
WebBoard
Guest
From: Todd Dick
Hi
What a great forum. I have a quick question.
I currently do not own either my own home or an IP. I am currently trying to decide, what is the best way forward: 1) buying my first place as an owner occupier residence to live in, or 2) buying my first place as an IP and continue renting?
My strategy is – I want to have an IP in roughly 2-3 years. I am curious, which way forward would be better – exploring number 1 or 2.
Some things I have been thinking about are:
1a) If I buy a place as an owner occupier – I have the ability to apply for the government 1st home owner grant of $14,000. If I live in and sell the place a few years later (to buy an IP) I may be able to walk away with a small profit if growth in the property works in my favour (and given I do not have to pay capital gains tax on any profit).
2a) If I buy the place as an IP – I have the opportunity of using tax advantages including negative gearing, writing off interest on the loan, (I would be probably taking out an IO – for the IP) purchase costs, etc, and after 2-3 years, I still have an IP (or maybe 2-3 by this stage). The disadvantage is that I will continually have to pay rent (money going into someone else’s pocket) and do not qualify for the $14,000 grant as I would in number 1.
At the end of 2-3 years, can someone tell me what they think which one is the better approach?
Much Thanks,
TD
Hi
What a great forum. I have a quick question.
I currently do not own either my own home or an IP. I am currently trying to decide, what is the best way forward: 1) buying my first place as an owner occupier residence to live in, or 2) buying my first place as an IP and continue renting?
My strategy is – I want to have an IP in roughly 2-3 years. I am curious, which way forward would be better – exploring number 1 or 2.
Some things I have been thinking about are:
1a) If I buy a place as an owner occupier – I have the ability to apply for the government 1st home owner grant of $14,000. If I live in and sell the place a few years later (to buy an IP) I may be able to walk away with a small profit if growth in the property works in my favour (and given I do not have to pay capital gains tax on any profit).
2a) If I buy the place as an IP – I have the opportunity of using tax advantages including negative gearing, writing off interest on the loan, (I would be probably taking out an IO – for the IP) purchase costs, etc, and after 2-3 years, I still have an IP (or maybe 2-3 by this stage). The disadvantage is that I will continually have to pay rent (money going into someone else’s pocket) and do not qualify for the $14,000 grant as I would in number 1.
At the end of 2-3 years, can someone tell me what they think which one is the better approach?
Much Thanks,
TD
Last edited by a moderator: