New here & Builder advice

[Vai-man]

Hi there i am 21 currently a apprentice chippy, formerly a IT Network Admin.

I am wanting gain knowledge look and listen to hopefully gain a footing in the property world

I have just finished building my first house a 3bed 2bath single level house on a 503m section in a northen wellington suburb.

Total cost was 160,000 section 145,000 build. Current value 415,000
So i believe i have got a good start with this property but i want to be able to kick on i don't want to stagnate.

I have been going though a few scenarios.

Keep and rent out and try and build another similar? What are the implications for this?

Keep and rent out and try and buy a renno? the difficulty being finding the right house that works with my numbers.

Sell and go again with the same house in order to keep my initial gain.

In a ideal world i would keep and go again but i have having a little trouble trying to get the figures right.

I would also like more info on how being in the trade will affect eg tainting assets what im liable for etc.

Any recommended books blogs or people to talk to would be great i am currently trawling the forum for information and what a great place it is!

Any advice or opinions would be great im here to learn, arnt we all?

Thanks for your time

[Davo36]

Wow, you've done really well for your first project Vai-man.

What you do from here may depend upon your equity. If you can rent it, and easily cover the mortgage on this property AND the next one until you finish it, then do that.

But if you'd be really stretched, then the thing to do is sell it and do the next one. It's way less risky this way.

But then of course you'd possibly be seen as a developer and have to pay tax on the money you've made... No easy answers really.

[spaceman]

In another thread I said if I could turn back the clock I'd be more aggressive.

I'd encourage you to borrow as much money as you possibly can and to buy/build and keep as many properties as you can as fast as you can while you're still young and let time and inflation be your best friends.

WARNING WARNING... this is not without risks and I wasn't man enough to do it myself.

Cheers
Spaceman

[Rosco]

Hi Vai-man,

You need to talk to a property accountant about tainting, tax on sale of properties and specific builder provisions.

- There is normally an exception for your personal family home. So if you actually live in this, then generally the sale is not taxable.
- But if you start a trend of buying and selling your personal family home, then this will become taxable.
- Also you will most likely be tainted as a 'builder', therefore if you sell a rental within 10 years, any gain will be taxable.

The above is very general advice, and you will need to obtain specific advice for your circumstances.

I hope I've helped a little

Ross