Converting from PPOR to IP

Hi guy,

I know this question has been answered many times before, but I would usually happily search for them myself, but a bit tight with time as I am relocating soon and am busy doing all the related tasks. I have a few questions if would be so kind forumites:

1) Are there any things to watch out for converting my current PPOR to an IP?
2) A depreciation schedule is of advantage regardless if your IP is negatively geared or positive cash flow? - is that correct?

Thanks in advance for your answers. Now the relocation is happening I will in effect be owning my first IP:p So quite excited about that.
 
Hi guy,

I know this question has been answered many times before, but I would usually happily search for them myself, but a bit tight with time as I am relocating soon and am busy doing all the related tasks. I have a few questions if would be so kind forumites:

1) Are there any things to watch out for converting my current PPOR to an IP?
Get a valuation/assessment done for CGT purposes.
2) A depreciation schedule is of advantage regardless if your IP is negatively geared or positive cash flow? - is that correct?

Thanks in advance for your answers. Now the relocation is happening I will in effect be owning my first IP:p So quite excited about that.

Interesting that you use negatively geared and positive cash flow in the same sentence! ;)

Roughly...
Negative geared: gross outgoings are higher than incomings
Positive geared: incomings are higher than gross outgoings
Positive cash flow: After tax (net outgoings), the cash flow is positive, even though you might be negative geared. ie. your tax refund (often largely due to depreciation) offsets your cash losses.

So to answer your question, definitely get a DS done; it might turn that negatively geared-negative cashflow property into a negatively geared-positive cashflow property. :cool:
 
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