Investing Ideas
Strategies To Grow Your Money
Strategies To Grow Your Money
Property Investment
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Property Strategies
First Home Owners Grant
The first home owners grant was introduced on the 1st July 2000 and is a national scheme funded by each state and territory. Each state might provide different incentives so its a good idea to check the website below to see what you are eligible for.
http://www.firsthome.gov.au/
Utilizing the first home owners grant is a great way to get into your first investment property. What some people might not know about the grant is that you don't have to move into the property right away, it can be rented out for up to 12 months before you have to move in. But its important to know that if you go over the 12 months the grant will have to be paid back.
The main criteria of the FHOG is that you live in the property for a continuous period of 6 months, so another option available is to do this first then turn it into an investment property after the 6 months is up.
It is also important to know that if you do not claim the FHOG on your investment property you will still be eligible for the grant when you buy your primary place of residence. But if you are buying with a friend or partner only one of you can claim the grant.
Investment Group
Getting into the property market can be difficult if you are just starting out so investing with others will help bring down the costs of owning an investment property. Investing in property with friends or siblings is now becoming more common, but it is important to seek legal advice before doing this to look at potential pitfalls and how to deal with them if they occur. Its important to know that costs can only be claimed in the same portion that the property is owned, i.e if its 50/50 then each owner can claim 50% of the total ongoing costs and only need to include 50% of the total rent in their tax returns. It is a good idea to use a trust structure or a company structure when investing with others so that the owners can buy each other out without incuring fee's such as stamp duty everytime the owners change. It is also easier to sell your share in the trust. A Good accountant should know how to structure a company/trust if you were invest with others.
Equity
If you have owned your home for a few years already then your property may have increased in value. If this is the case then it is possible to take an equity loan against your house to finance the deposit for your first investment property. This loan will also be tax deductible because it is for investment purposes. This option is a great way to build an investment portfolio because you can avoid paying lenders mortgage insurance if you use a 20% deposit, and now you will have two properties growing in value instead of one. As these properties continue to grow you can keep repeating the strategy and buy more and more properties.
Use your PPOR to your Financial Advantage
If you already have an investment portfolio if may be able to use the following strategy to pay off your primary place of residence faster (PPOR).
Put the rent you are receiving from your investment properties straight into your PPOR loan account. Take out an equity loan against your PPOR and use this money to pay for all the ongoing costs of your investment properties, because this loan is being used for investment purposes it should be tax deductible. All the money you were using to pay for ongoing costs can also be put straight into your PPOR account too, doing this can save a lot of money and allow you to pay off you primary residence faster. To utilize this strategy you may need a private ruling from the ATO to determine whether you are using this strategy for the tax benefit or for investment.