GushRokess56
New Member
Hi everyone, I need advice on our next step. My wife and I have $320,000 in savings. We plan to build a granny flat on her father's property for $200,000. We live rent-free at home and have a combined income of about $200,000. I also have a novated lease with a $1,300 monthly payment taken from my pre-tax income.
We are deciding between two options:
A. Pay $200,000 cash for the granny flat. Use the remaining $120,000 for an investment property and borrow the rest. The granny flat rent (about $2,200 per month) would go into an offset account. The problem is the granny flat is on her father's land, so he legally gets the rent. We are not sure how taxes work for him or how we can get that income back.
B. Ask her father to take a $100,000 equity loan against his property (over 10 years). We contribute $100,000 cash to the build. Then we use $220,000 for an investment property. The granny flat rent would cover his loan payments, with extra money left over.
Our main questions are:
1. Which option builds more wealth over the long term?
2. How does rental income work legally when the granny flat is on someone else's property?
3. Is there a better setup we ahve not thought of?
Any property investors, accountants, or mortgage brokers with experience in this area would be very helpful.
We are deciding between two options:
A. Pay $200,000 cash for the granny flat. Use the remaining $120,000 for an investment property and borrow the rest. The granny flat rent (about $2,200 per month) would go into an offset account. The problem is the granny flat is on her father's land, so he legally gets the rent. We are not sure how taxes work for him or how we can get that income back.
B. Ask her father to take a $100,000 equity loan against his property (over 10 years). We contribute $100,000 cash to the build. Then we use $220,000 for an investment property. The granny flat rent would cover his loan payments, with extra money left over.
Our main questions are:
1. Which option builds more wealth over the long term?
2. How does rental income work legally when the granny flat is on someone else's property?
3. Is there a better setup we ahve not thought of?
Any property investors, accountants, or mortgage brokers with experience in this area would be very helpful.