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From: Julie Villani
Hello all,
First time post - enjoying the variety of information shared generously on these boards.
Husband and I (self employed - he milk bar/cafe, me medical typing service home based) have PPOR worth approx 550-600K (150K loan) in Prahran, Melbourne.
There is a Duplex 4 sale(650K) in the local area. Our idea is sell PPOR and purchase Duplex, live in bottom level which has a garden and 2 BRs, and rent out top level for around $300.00 p.w. (3 BRs no garden). The property needs work - painting, floorboard polishing, etc. Further enhancements could be made to exterior, rendering, landscaping.
The painting and floorboard polishing would need to be done prior to us taking up residence (mould on downstairs ceilings - old dusty carpets - our teens have asthma). Top level would need these improvements also - but our understanding is that if the improvements are carried out before tenanted they are not claimable as expenses but are treated as improvements to property. If we wait until tenants are in place they would then be considered maintenance? Is this correct as we can probably overcome this by renting to our 18 year olds' friends short term.
Currently it costs us $285.00 p.w. to stay in PPOR. All of the loan on the duplex would be attributable to the rented out top level and we would be about $20.00 out of pocket a week. In effect, this move would allow us to use our disposable income (the $285.00 we used to pay on PPOR) to renovate, purchase further IPs, etc.
Question is the duplex has been on the market for about six weeks (Private sale). Apparently highest offer of 635,000 rejected by owner.
Are we missing something.
Would this be a wise decision, i.e. downgrade living to free up money available.
P.S. the Duplex has only one small car space - with no way of adding further parking. Also, Council has approved subdivision of property, so upper and lower level have separate titles (this still needs to be lodged with Titles Office, which I have been told can be done within 2 years).
I would really appreciate your help. Be gentle, though, extremely green newbie.
ozgal
Hello all,
First time post - enjoying the variety of information shared generously on these boards.
Husband and I (self employed - he milk bar/cafe, me medical typing service home based) have PPOR worth approx 550-600K (150K loan) in Prahran, Melbourne.
There is a Duplex 4 sale(650K) in the local area. Our idea is sell PPOR and purchase Duplex, live in bottom level which has a garden and 2 BRs, and rent out top level for around $300.00 p.w. (3 BRs no garden). The property needs work - painting, floorboard polishing, etc. Further enhancements could be made to exterior, rendering, landscaping.
The painting and floorboard polishing would need to be done prior to us taking up residence (mould on downstairs ceilings - old dusty carpets - our teens have asthma). Top level would need these improvements also - but our understanding is that if the improvements are carried out before tenanted they are not claimable as expenses but are treated as improvements to property. If we wait until tenants are in place they would then be considered maintenance? Is this correct as we can probably overcome this by renting to our 18 year olds' friends short term.
Currently it costs us $285.00 p.w. to stay in PPOR. All of the loan on the duplex would be attributable to the rented out top level and we would be about $20.00 out of pocket a week. In effect, this move would allow us to use our disposable income (the $285.00 we used to pay on PPOR) to renovate, purchase further IPs, etc.
Question is the duplex has been on the market for about six weeks (Private sale). Apparently highest offer of 635,000 rejected by owner.
Are we missing something.
Would this be a wise decision, i.e. downgrade living to free up money available.
P.S. the Duplex has only one small car space - with no way of adding further parking. Also, Council has approved subdivision of property, so upper and lower level have separate titles (this still needs to be lodged with Titles Office, which I have been told can be done within 2 years).
I would really appreciate your help. Be gentle, though, extremely green newbie.
ozgal
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