澳洲Australia property Just bought my first IP! | Sydney
在澳大利亚 The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m
So after looking for the past few months, I finally found a place and put in an offer which got accepted!
I would just like some advice though, as I am faced with the following situation.
The apartment I bought is pretty grubby, and not in the best shape (although with a good clean will be liveable as it was rented out in its current state) - but I'm planning to do some renovations on it.
Initially I was planning to move in for the first 6 months and do the renovations (also for FHOG), however after speaking to a friend last night, he said that I should rent it out right away (for 6 months), and then do the renovations afterwards so I can claim them as repairs?
The place needs new carpet/floorboards throughout, paint, bathroom, built-ins, blinds, light fittings.
What is the better strategy in your opinion? Also, if I do not move in immediately, do I then forfeit my CGT exemption when I sell later?
The other thing is while you're living in it, you don't get rent and can't deduct anything including interest, body corp, council rates, etc.
Maybe you could do some of the labour intensive repairs while living there and save the money intensive repairs for later on. An example would be the carpets. Quite easy to do in between renters and claim as a repair.
It all depends on the numbers though. Firstly what effect on your cashflow would living there have compared to renting it out and living somewhere else? If you could rent it for $500/week and live somewhere else for $300 then by living there for 6 months you are $5200 out of pocket. The tax saved by claiming the interest could be another $5000 depending on the size of your loan and your income level.
The best course might be to move in for 6 months and not do any renos, rent it out for a while and then do the renos. Or it might not pay to do any renos at all. Will it command a higher rent when it's renovated?
CGT exemption only applies while it is your PPOR.
Best course of actrion may be:
1. Tidy it up as PPOR without spending much then get it revalued at a higher value because you have improved it.
2. Rent it out, tenants wear out carpet, paint etc.
3. Tax deductible repairs.
4. rent out at higher rent
With any luck SS's tax experts will tell you evrything that is wrong with this plan and we all will have learnt something.