Buying a new property
Buying a new property is feasible options
But it has to be rentable property in area with higher rental income to make a feasible investment. Say at least 300K to 600K depending on whether it is unit or house.
That will mean that the initial outlay is quite big to buy the property
Even if the property prices do go up they wont go up exponetially
So compared to investment my return will be lower
Also I am now paying interest on 3 properties with sizable loans which is bit scary. Also I loose money through stamp duty, lawer etc.
But yes I am negative gearing.
But if I knock down my current IP and build a duplex I have two properties in place of one. Compared to build cost which would 500K to 700K the value increase would be big(Well hopefully). I can sell one property and rent other to get some of the money back or I can rent both. Rental income on brand new 3 bedroom duplex would be higher than current rental income on small old home with only 2 bedrooms. I am estimating that we should at least get same rent for each duplex that we are getting for current property.
Also since I am using the same land the land tax would be same (Please confirm) and would not increase.
Also regarding buying shares I would never use Margin Lending loan that is just a minefield. Instead I would refinance the IP Loan and get money to invest in Shares. Bank will let us refinance the IP Loan as it has large equity. I dont know whether it is acceptable tax wise. It should be ok as long as I prove to tax office that I used the money to buy shares right?
What do you think.
Buying a new property is feasible options
But it has to be rentable property in area with higher rental income to make a feasible investment. Say at least 300K to 600K depending on whether it is unit or house.
That will mean that the initial outlay is quite big to buy the property
Even if the property prices do go up they wont go up exponetially
So compared to investment my return will be lower
Also I am now paying interest on 3 properties with sizable loans which is bit scary. Also I loose money through stamp duty, lawer etc.
But yes I am negative gearing.
But if I knock down my current IP and build a duplex I have two properties in place of one. Compared to build cost which would 500K to 700K the value increase would be big(Well hopefully). I can sell one property and rent other to get some of the money back or I can rent both. Rental income on brand new 3 bedroom duplex would be higher than current rental income on small old home with only 2 bedrooms. I am estimating that we should at least get same rent for each duplex that we are getting for current property.
Also since I am using the same land the land tax would be same (Please confirm) and would not increase.
Also regarding buying shares I would never use Margin Lending loan that is just a minefield. Instead I would refinance the IP Loan and get money to invest in Shares. Bank will let us refinance the IP Loan as it has large equity. I dont know whether it is acceptable tax wise. It should be ok as long as I prove to tax office that I used the money to buy shares right?
What do you think.
