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True but a lot of that loss is depreciation and capital loss not actual cash, out of pocket loss.Still im not sure if it is viable.
Thanks guys. Cleared it up today.Both names on loan but only mine on the sale contract.I understand that this way i will pay more capital gain but my goal at this stage is to minimise tax.We may have children down the track so dropping back to one wage may be a struggle without the tax break helping repayments.I fixed the loan for 5 years. Which should see our current home payed off and hopefully some capital gain on the investment. I am actually thinking of my next purchase even though contracts have not being sighned on this one. im getting the bug.
By the way my offer on a ip was excepted today so im on my way. But if any one can answer my question above about my wifes name on the sale contract it would help me out heaps.[biggrin]
Ok so it is ok for both my wifes and my name to be on the loan application but what about the contract for the sale of the property. They asked for her name to be on there as well.Does that mean she is buying it as well and therefore tax minimisation must be from both our wages.???
Thanks for the response guys.Very helpful. I made a offer today so ill see what happens.One of my possible plans down the track is to sell the house we live in at the moment and take the $150,000 (approx)profit. Move into this investment property and make it our home and possibly add a few rooms to increase its value. HOw will this affect me tax wise with capital gains tax down the road etc.
Yes it is. My mother is a retired real estate agent and she is happy to manage the property for nothing. And as far as repairs go they are extremely well maintained and before i was a mechanic i was a carpenter so i have repairs covered.So now i am struggling to find things to tell me not to do it. I tend to over analyze everthing by nature but i think this still looks like a good idea.
So for my wife and i it would make more sense to go for negative gearing than positive cash flow as we have a fairly high desposable income and i pay a fair amount of tax.. Is it worth having one negative geared and one positive cash flow property. I ask this becouse the IP i am after leaves no financial burden on me( same incoming and out goings). So i guess we could look at another property. But i guess it would be better to get our home loan down before we get too deep.Still owe $200,000 on a $320,000 property.
Hi agin.Thanks for the responses. What is trust structure on a non cross colaterised loan ???
Originally posted by wanelad:Hi yes you pretty well have it right if all your costs such as mortgage rates etc over the year are less than the income it becomes positive cash flow. There are ways to help create this by applying to have an advance tax relief. You fill out the form to have less tax paid from your wages. Further you can claim depreciation in some instances which also increases the cash flow.
To find cash flow positive properties you would need to seek regional properties in mining towns etc. The risk is if the mining industry slows down may loose some capital growth. However a lot would argue this point as a lot of expectation in China maintaining the demand
Wayne
Mortgage Adviser
Email [email protected]
http://www.alphamortgagesolutions.com.au
Refinace, Loan Consolidation, Owner Occupied or Investment Finance. Free Service we come to you!Well my situation is this.
Loan amount $460 per week interest only.
Rates about $35 per week For a total of $495
Now rent is $320
Tax refund of approx $190 (confirmed by accountant) Total $510
Now that leaves me about $15 bucks in front so i guess the loan looks after itself and since im after capital gain by either a sale down the road or seperate the units and sell, it seems like a ok buy.There is no financial load on me and a hopeful capital gain down the road.I guess to add to point one above, is a property considered a positive cash flow property when the rent covers loan payment plus rates etc. If so where are these properties.No place i look at becomes positive until a fair deposit is used like 50%.If that is normal i guess i should try and make capital growth on a property,sell, then use the money made on that sale to buy a positive cash flow property.That sounds like a 5 year plan.
As far as structuring the loan.It is interest only for two years so i can build up cash after purchase for security.Loan % is very good after i pushed the lender with morgage choice saying they couldnt match it.Also is it a smart move with me still owing 200,000 on my primary residence(worth 320,000). I guess what im trying to do is get the amount of tax i pay down as it is a fair slice of my wage.. So if i can get it so that with rent and tax refund combined it more or less covers the loan,i can continue to pay more of my current home loan with my income and let the duplex self sustain itself and hopefully see a capital growth in the duplex in a few years if sold whole or seperate/strata title and sell seperate hopefully making a bit more off them.Even if the market stays the same for some time i think i can continue payment on it with out it adding much of a financial burden.Does this sound right.
