Some advice on best Investment strategy please.

[Poor Andrew]

Hi there,

I am wanting to adopt a strategy that will provide me with the greater equity within a 10 year period.

My plan is to buy a house, townhouse or unit in Sydney ( a cheapy because that's all I can afford) for around the $400k mark, move in and renovate around me then flip it and do it all again. Do I need to live in it for 12 months to avoid CGT?

Or...

Do the renovation, revalue, leverage equity out of the property, find a tenant for renovated house and do it again with another property in Sydney therefore building my portfolio.

I am not sure which is the better way to go.

Any thoughts or suggestions that may help in my decision?


Thanks very much

Andrew

 

[RenoTeam]

Hi Andrew,

There are so many ways to leverage yourself financially with Renovating, and a lot has to do with the way you structure your purchasing. The structure you purchase in also is based on your time frames and outcomes you are looking for.

We have used many ways over the years and it would take a week to explain the intricate details of each one. Everyone's finances are so very different, so how you structure for maximum benefit is imperative

Holly

 

[locko24]

That's a very broad question Andrew, but your second option is the one i'm currently following (or similar).
Don't need to worry about paying CGT, and if prices go up, your equity goes up exponentially, with the number of houses you own (though of course the reverse is also true)

 

[travelbug]

If you buy the house to flip you pay CGT. If you buy it to live in (as your PPOR) then change your mind and sell it you don't pay CGT. It's the intention" that counts.
If you keep doing it though the tax man will start to question you.

Be careful with you figures. Make sure you have a good idea of in costs (stamp duty, solicitor, etc) reno costs and out costs. You need to have a good idea of what the value (post reno) will be. Otherwise you may find yourself going backwards.
If you do buy and hold. Work out same as above but work out what the rent would be to calculate weekly out of cost expenses. If you live in it first while renovating then move out you can rent it for up to 6 years and not pay CGT (assuming you don't buy a PPOR in the meantime. Of course your "intention" has to be for it to be your PPOR but you changed your mind and decided to rent it.

We buy, reno (to increase equity and rent), rent. We will reval most next year to withdraw equity.