Can anyone help me with a couple of questions, please!!
We are relocating due to my husbands new job and we currently own our home. Our problem now is what are we going to do with our home. The easy option is to sell the house but sadly the market is still low and we will loose the $30000 deposit we put in selling at market value. I don't want to let that happen so was thinking about renting it until hopefully the market gets better or someone is willing to pay what we want for it (which is only $10000 more then we paid for it 2.5 years ago).
But what we could get for rent minus the real estate fee means we will still be paying over $220 a week towards our mortgage and where we are relocating the rent is extremely expensive at at least $150 more then what we would pay where we are. Plus add on the $50 a week I put aside for rates and $25 a week for water as well.
So my question is what is the advantages to renting your house out? I have heard things about negative gearing, paying less tax and things like that but I don't know how it works.
Would you just sell cheap and loose your deposit and risk never being able to own a home again??
I wish we were just renting as it would be soooo much easier!!
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30-10-2012 20:17 #1Member
- Join Date
- Dec 2011
A question for those with a investment property?
31-10-2012 13:09 #2
hi mumma2threecherubs, first congrats on owning your first home, that is a major achievment these days. Personally, I would be reluctant to sell any property I own. Where are you relocating to? If it is still reasonably close, then absolutely dont sell. Do you intend to rent in the new location?? Just a suggestion, you maybe able to get a second mortage with the equity in the first house, and buy a second house. Then you have two houses to rent out, and only a smallish debt on the properties. If you are going to be on the other side of the country, then you will really need to have good real estate managers to look after the property. If you can handle the possible stress, with tenants, then go for it and start building your property portfolio. We have done this and it has worked well over the many years. The negative gearing, is simply, you loose money on the investment property, and have to put some of your own income into it, that gives you a tax deduction. It is far better to have a break even situation, you dont loose money from the property, but with the necessary expenses that you are allowed to claim, maintence, and real estate fees, and interest on your borrowings, you dont make any money . You do make money over time because of capital gains, the value of the property goes up. Hope that helps. Marie.
Last edited by SuperGranny; 31-10-2012 at 13:12.
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