Which one PPOR or IP ?

Hi All,

After reading various posts from some time. Now time to start asking queries to buy my first.

I am currently renting one bedroom unit.

1. What should buy first PPOR or IP ?

Also, can someone please correlate this with FHOG as I may be eligible if I buy PPOR.

If it is already explained/discussed exactly in some other thread please suggest.

2. Please recommend conveyancers, building and pest in NewCastle area or let me know if it doesn't matter which location conveyancers, building and pest people are and where your IP is ?

3. Suggest Mortgage Insurance, Landlord insurance or some broker for this.

Ask if you need any info from my side to suggest.

Edit: Propertunity, I edited my thread, added two more question. May be you can have a look on those as well.
 
The answer will always be "it depends".

Here's a general answer knowing nothing about your circumstances.

Buy a PPOR. You will get $7K from the Feds, $3K (I think still?) from the state of NSW + you will pay no stamp duty.
Live in it for 6 months minimum. Then make it an IP if you want or borrow against it to get deposits for more IPs.
 
I am working in Sydney. I am interested in buying in NewCastle. Initial thought I can't live in NewCastle as I work in Sydney and can't travel 150km daily.

You have 3 options if you want to buy in Newy and work in SYD:
1. Buy a PPOR in Newcastle and travel up and down for 6 months (lots of people do it), then make it an IP
2. But a PPOR in Newcastle and live in it on weekends and maybe one day mid-week (its only for 6 months)
3. Buy an IP in Newcastle from the outset, leave the PPOR till later
 
Is there any particular reason why you're capitalising the C in Newcastle?

IP or PPOR first? Financially, probably IP first. Preferrably multiple IPs first. Very personal decision, though. With IPs you get rent, get to deduct expenses including depreciation, and you're less likely to overcapitalise. However, it depends on a lot of things, especially your personal circumstances. For example, people with families may want the 'stability' of a PPOR more than single people.

You can't claim FHOG if you're buying it as an IP, but you should be able to claim FHOG for a future PPOR purchase. However, stamp duty concessions may be affected permanently.

What's your plan? i.e. what are you planning to do AFTER you buy this property?
Alex
 
Is there any particular reason why you're capitalising the C in Newcastle?

IP or PPOR first? Financially, probably IP first. Preferrably multiple IPs first. Very personal decision, though. With IPs you get rent, get to deduct expenses including depreciation, and you're less likely to overcapitalise. However, it depends on a lot of things, especially your personal circumstances. For example, people with families may want the 'stability' of a PPOR more than single people.

You can't claim FHOG if you're buying it as an IP, but you should be able to claim FHOG for a future PPOR purchase. However, stamp duty concessions may be affected permanently.

What's your plan? i.e. what are you planning to do AFTER you buy this property?
Alex

1. Newcastle because having interest in student accommodation for high yield to have better serviceability in longer run. Whyn't other uni area is another story....

2. I am single as of now and for next 1.5 - 2 yrs.

3. This is what I wasn't aware and looking for such info :D. You saved my 7k. Now, I need to think on loosing 11k stamp duty (IP buy will be around 350k) Also, I am not sure but I read somewhere that on first IP stamp duty is 50% off ? Don't remember exactly this stuff.

4. I will put this one on rent. And then again same question to my self ans to somersoft mates should I buy PPOR or IP, if I don't by PPOR now. Another plan is keep buying, each buy will depend on current serviceability. My rough feeling is I can buy 2 every year till next 3 years. Rest it will depend on many factor over a period of time.
 
Last edited:
alexlee is quite right. If you want to get ahead in your wealth creation, then you need to live as cheaply as you can yourself (rent & no PPOR purchase) + invest as much as you can.

I can see a few holes in your strategy, I hope you don't mind me pointing out.
1. If you are buying Uni student accom. then you just missed the start of the Uni year - end of Feb/Mar.
2. I would be surprized that you'd be able to buy 2 a year for the next 3 years (sorry if this is not the case, but you have provided little information)
3. Future serviceability can be affected with student accom. as opposed to standard resi leases. This may be a temporary glitch in finance due to the hangovers from the GFC - but March's API Mag has an article on a lady that is finding it difficult to convince banks that student accom is a good thing.

Your budget of $350K should be OK.
 
alexlee is quite right. If you want to get ahead in your wealth creation, then you need to live as cheaply as you can yourself (rent & no PPOR purchase) + invest as much as you can.

I can see a few holes in your strategy, I hope you don't mind me pointing out.
1. If you are buying Uni student accom. then you just missed the start of the Uni year - end of Feb/Mar.
2. I would be surprized that you'd be able to buy 2 a year for the next 3 years (sorry if this is not the case, but you have provided little information)
3. Future serviceability can be affected with student accom. as opposed to standard resi leases. This may be a temporary glitch in finance due to the hangovers from the GFC - but March's API Mag has an article on a lady that is finding it difficult to convince banks that student accom is a good thing.

Your budget of $350K should be OK.

1. Hmmm, I know can't help myself on that now. But I got a suggestion that next semester starts in July that wouldn't peak as Feb but should be okay. Can you please suggest here how much okay it is to get started during July or better wait till next jan/feb.


2. Didn't calculated now much on this aspect may be wrong. But in general looking at my financial circumstances and very minimal family dependency on me, I think I may. Will discuss/think later.

3. Will checkout with broker on finance stuff.

Thanks for pointing the holes, I am open for suggestion in future threads as well. Good way to learn for me.

Can someone put some lights on stamp duty part in my above post. (point # 3)

Prop, after you replied I added two more question in my first post. Can you please have a look.
 
As to best time of the year to rent to students - be guided by a good PM that specialises in the area. There are a good couple of them.

Stamp duty is not payable on a PPOR where you are a FHB (as the rules stand at the moment). You will only ever get 1 stamp duty concession + 1 FHOG. During the GFC they did introduce 50% SD concessions for the purchase of new (or about to be newly constructed) property, even if you had other property/ies already.
 
1. Newcastle because having interest in student accommodation for high yield to have better serviceability in longer run. Whyn't other uni area is another story....

While yield might sound attractive, if it's purpose built student accom with no alternate use, then capital gains might be limited. The question is, at this stage for you, is capital gains or yield more important? I don't know the answer, but you have to ask the question of yourself. If you're relatively young, future salary increases may increase your serviceability.

3. This is what I wasn't aware and looking for such info :D. You saved my 7k. Now, I need to think on loosing 11k stamp duty (IP buy will be around 350k) Also, I am not sure but I read somewhere that on first IP stamp duty is 50% off ? Don't remember exactly this stuff.

Look at the Office Of State Revenue closely. You have to get it from the source, and you have to understand and remember it. I've read the FHOG rules, but if I'm wrong, I'm not taking responsibility for it.
Alex
 
Look at the Office Of State Revenue closely. You have to get it from the source, and you have to understand and remember it. I've read the FHOG rules, but if I'm wrong, I'm not taking responsibility for it.
Alex

Droped email to OSR about this. Will give a call to them if they support via phone.
 
Got reply from OSR, 2 good things

If you purchase an investment property fuirst, then later purchase a home to live in, you may apply for the First Home Owner Grant on the second home but not the stamp duty exemptions/concessions(First HOme Plus). - Gained 7k

and they say if I live in one room and rent out others, then also I will be eligible for FHOG + Stamp duty exemption

If the first home you purchase is to live in and rent out one room, then yes that will still qualify for the First Home Owners Grant and the First Home Plus. - at least got some option to save 11k

Now, it is very hard for me to stay in NewCastle and share the house with other's and travel daily for 4-5hrs. If I do I will save 11k (stamp duty)
 
Top