W
WebBoard
Guest
From: Mike .
Keep or cash out?
From: Owen
Date: 02 Nov 2000
Time: 14:00:22
Here's one for the thinkers out there.
Say I have a $400K owner occupied house freehold and I'm looking at selling up and moving. Do I -
a) Buy say a $200K unit freehold and live in it and invest the other $200K in a small number of IP's? Later down the timeline when I want to move into a nice place for myself I can sell up my home and have a large CGT free deposit with the income from the IP's paying the small mortgage.
b) Invest the whole $400K in large number of IP's and rent something myself? Later down the timeline when I want to move into a nice place for myself I can use a small deposit with income from lots of IP's paying the large mortgage.
The way I see it if I do a) I end up paying costs like strata fees and buying costs myself on my place but I get the growth on the property CGT free. If I do b) I can ensure that the IP's pay for my rent so I have no personal costs but I lose out on the outright equity of a freehold property. However further down the timeline the income from all the IP's can be used to pay the mortgage on the nice place I buy for myself.
Obviously CGT is only an issue if I sell an IP (no plans too) and the equity remains the same no matter what scenario I follow so that doesn't come into the question.
I guess what remains then is should I cash out my own home and rent for a few years before buying back in for my own use or is that freehold property to good to give up? Own home or lots of IP's? What to do, what to do????
Keep or cash out?
From: Owen
Date: 02 Nov 2000
Time: 14:00:22
Here's one for the thinkers out there.
Say I have a $400K owner occupied house freehold and I'm looking at selling up and moving. Do I -
a) Buy say a $200K unit freehold and live in it and invest the other $200K in a small number of IP's? Later down the timeline when I want to move into a nice place for myself I can sell up my home and have a large CGT free deposit with the income from the IP's paying the small mortgage.
b) Invest the whole $400K in large number of IP's and rent something myself? Later down the timeline when I want to move into a nice place for myself I can use a small deposit with income from lots of IP's paying the large mortgage.
The way I see it if I do a) I end up paying costs like strata fees and buying costs myself on my place but I get the growth on the property CGT free. If I do b) I can ensure that the IP's pay for my rent so I have no personal costs but I lose out on the outright equity of a freehold property. However further down the timeline the income from all the IP's can be used to pay the mortgage on the nice place I buy for myself.
Obviously CGT is only an issue if I sell an IP (no plans too) and the equity remains the same no matter what scenario I follow so that doesn't come into the question.
I guess what remains then is should I cash out my own home and rent for a few years before buying back in for my own use or is that freehold property to good to give up? Own home or lots of IP's? What to do, what to do????
Last edited by a moderator: