Expensive PPOR (1st home) but..

I am thinking of purchasing a nice apartment and renting out one of the rooms to help with the mortgage. Living in one room and renting out the other will result in a shortfall of about $20,000 p.a taking into account everything. If I were to rent out the whole apartment, its almost neutrally geared due to my 65% LVR.

Do you think this is a good idea ? I'm thinking $20,000 loss isnt too bad considering I get to own a place myself rather than paying $400 p/w of rental which sums up to roughly the same costs of owning a property. Plus, I also get to live in it , making half the property as my PPOR and half as an IP therefore claiming half the tax deductions. (Assuming apartment divided 50% and 50%)

Any advice / help regarding this would be very much appreciated.

Cheers ~
 
If you claim tax deductions, you also lose some of your CGT concessions.... a big attraction of PPOR.... so make sure the numbers stack up.

Cheers,

The Y-man
 
I am thinking of purchasing a nice apartment and renting out one of the rooms to help with the mortgage. Living in one room and renting out the other will result in a shortfall of about $20,000 p.a taking into account everything. If I were to rent out the whole apartment, its almost neutrally geared due to my 65% LVR.

Do you think this is a good idea ? I'm thinking $20,000 loss isnt too bad considering I get to own a place myself rather than paying $400 p/w of rental which sums up to roughly the same costs of owning a property. Plus, I also get to live in it , making half the property as my PPOR and half as an IP therefore claiming half the tax deductions. (Assuming apartment divided 50% and 50%)

Any advice / help regarding this would be very much appreciated.

Cheers ~

Why not live in it for 6 months (assuming you get FHOG) then turn it into a IP?

Or you can have it as a IP and rent some where else. Although you will be paying $16 more or so per week ($20,000/52 - 400) you will make that back easily with tax deductions. So it might actually work out better this way.
 
If you claim tax deductions, you also lose some of your CGT concessions.... a big attraction of PPOR.... so make sure the numbers stack up.

Cheers,

The Y-man


Thanks for that YMan, I'm well aware of that. Anyway, I dont think I'll be selling the property at all.

Renting another cheaper place to live in would be more strategic financially..
however, not all decisions should be made purely on the financial aspect isnt it ? The property costs more than half a mil , therefore, I plan to enjoy life a little and live in it.
 
Renting another cheaper place to live in would be more strategic financially..
however, not all decisions should be made purely on the financial aspect isnt it ? The property costs more than half a mil , therefore, I plan to enjoy life a little and live in it.

Well if that's what you want to do, then do that. As you said, life is not all about what's best financially. Enjoy yourself, enjoy your new home and have a good time!

Mark
 
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