was looking for some advice… we just bought our first investment property at the weekend. we currently have approx 170k left to pay on our home (prob worth approx 400k (townhouse)… our investment property just bought is based in tullamarine (bought for 315k…
I am wondering how we best go about mortgages etc
from looking at the internet, it seems a lot of people recommend "interest only" for investment properties.. to give some background – my husband earns approx 80k/yr and i earn 54k…
however my dilemna is we want to take out an extra 30k (for a trip (costs 20k) and then the remaining 10k is as a safety net).. which loan do i put this onto? should i put it on the investment loan (house costed 315k, stamp duty 15k – so loan 330k but by adding the 30k, would then be 360k)… our own home loan is about 170k
what do you recommend – i asked our accountant and he said that we will not be able to use that 30k for tax reasons as it really for personal use etc…. the accoutnant is actually on holidays at the moment so he was not really that interested in talking to me about it (understandably i guess)…
any adive woudl be good – what do you recommend?
Why put it on either? Take out a separate loan would be the easiest. But since it won't be deductible, you could just increase your home loan.
You certainly would want a IO loan for an investment property while you still have a non deductible loan – otherwise you will be paying down the investment and losing tax deductions while keeping your nondecutible loan high meaning more interest.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
i probably should have also stated.. our home loan was split on a variable and fixed loan now ending, so we are going to make it all variable now (was originally 244k, now will be around 170k when join the 2 loans)… so do you think i should just put it on that one as I redoing loan anyway… or you also mentioned getting new loan alltogether.. which do you think is the best option – thank you for all your advice…
Hi Deidre
If you are not going to deduct the interest, then from a tax POV you don't have to worry. either a separate loan or adding it to the $170k should be ok. If there is any chance the $10k safety net could be used for the investment it may be an idea to have a separate split for this as you could claim the interest – but it all will depend on your lender and the costs involved. The tax savings could end up being less than the charges if not careful.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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