Hi all,
I've been a lurker for awhile and have recently joined. Just after a bit of advice regarding a recent purchase of a unit in inner city Sydney.
Myself and my partner have just purchased a property for $900k. We are currently renting a unit in the same block and recently signed another year lease for $800 per week prior to purchasing.
However, I'm not sure whether we are better off:
(a) breaking our current lease (6 weeks rent), undertaking about $20k improvements and moving in as our PPOR
OR
(b) renting out the property for 12 mths until our lease expires and negatively gear the costs against our incomes (we earn about $100k p.a. each) then undertake renos and move in as PPOR.
The unit we have purchased is the same size, layout and aspect to the one we are renting. There are existing tenants on an expired lease who are interested in staying on. I've checked with the property manager and they seem like good tenants (rental history etc is good). We would be looking to increase the rent slightly to $800 so that we would effectively 'break even' with regard to our outgoing rent. Obviously there are other expenses (property mgt, strata, loan interest etc) but at least these are deductible.
I realise that there are CGT issues if we ever sold but, even if we did move, we would be unlikely to sell as it's in a good rental area - close to CBD, universities - and a unit with a bit of character - converted warehouse, industrial type feel.
Any observations or thoughts either way would be much appreciated
I've been a lurker for awhile and have recently joined. Just after a bit of advice regarding a recent purchase of a unit in inner city Sydney.
Myself and my partner have just purchased a property for $900k. We are currently renting a unit in the same block and recently signed another year lease for $800 per week prior to purchasing.
However, I'm not sure whether we are better off:
(a) breaking our current lease (6 weeks rent), undertaking about $20k improvements and moving in as our PPOR
OR
(b) renting out the property for 12 mths until our lease expires and negatively gear the costs against our incomes (we earn about $100k p.a. each) then undertake renos and move in as PPOR.
The unit we have purchased is the same size, layout and aspect to the one we are renting. There are existing tenants on an expired lease who are interested in staying on. I've checked with the property manager and they seem like good tenants (rental history etc is good). We would be looking to increase the rent slightly to $800 so that we would effectively 'break even' with regard to our outgoing rent. Obviously there are other expenses (property mgt, strata, loan interest etc) but at least these are deductible.
I realise that there are CGT issues if we ever sold but, even if we did move, we would be unlikely to sell as it's in a good rental area - close to CBD, universities - and a unit with a bit of character - converted warehouse, industrial type feel.
Any observations or thoughts either way would be much appreciated