A couple of ways…

Increase the rent, probably not an option given the 2 increases already…
Reduce the interest you're paying, but this would obviously affect the tax deductions available to you.

TBH, probably best you listen to Richard over myself, he's far better versed in these things

IMO you should start by getting the current IP to CF+ status – set up an offset account linked to the IP and dump everything in that. THEN start looking at your next one.

Thanks Kyla. 

Everyone here was new at some stage (I still am) – it's all good 

A couple of tips you'll see around here are Read book after book after book on the subject and learn different people's strategies and how they implement them. I also read up a lot on structures (trusts, tax etc) so that when I speak to my accountant, we're on the same page (it ends up costing less because you're asking your accountant less questions and his time is your money .

Is the property in both of your names? If so, A. You've now both lost the FHOG (I assume you knew that though) and B. here's where an accountant may have come in handy before purchasing…

If the property is in both names 50/50, I believe half the income and half the interest has to be attributed to you and your husband i.e if you pay $30k per year interest (for example), 15k has to be attributed to both of you. Now, obviously if you're looking at reducing your taxable income, having the property in your husbands name alone would have more benefit – for every $1000.00 reduced from your husban'd income, he reduces his tax bill by $400.00 if he stays in that bracket. You only reduce yours by $300.00. Of course that would have been dependent on one of you being able to service the loan individually, so it may not have been relevant…

You CAN redraw the extra deposits you make, but the interest incurred on the investment loan by the redrawn amount won't be deductible so take this into account when deciding. Of course the advantage is you've effectively earned the same rate of return as your mortgage interest rate tax free by saving that much. Also, make sure you do your sums before contributing extra, as this will (perhaps permanently) affect the ability of the loan to reduce your taxable income – the less interest you pay, the less you reduce your income by.

We can theorise all we want here, but you really should speak to an accountant and / or financial advisor before going either way

I actually agree with you JRr, but we're obviously in the CF+, debt is only good if someone else is paying it group  Different mindsets and different situations, neither being incorrect, just different.

What IS kyla's financial situation and what strategy has she decided upon? Without knowing this I thought it best to put as many cards on the table…

As duckster has demonstrated, paying down the loan CAN be beneficial in a CF- situation, also demostrating just how important it is to have a clear idea of your own financial position and your objectives before jumping in to the investment game.

My situation is different again, as is my structure so I would do things differently again

Sorry kyla, your initial thread said IO (Interest Only) loan. Fixed Interest (FI) is obviously a different kettle of fish and I read it as WITH an offset option not WITHOUT – apologies…

2 years fixed probably isn't that bad a bet. Depending on your circumstances, fixed interest may work better for you. For instance, you may get a benefit out of prepaying the interest on the loan and bringing the deduction forward. Talk to your accountant about that though… There's also the certainty of knowing exactly what your payments will be – just because the RBA has said it's going to lower rates, there's no guarantee the banks will follow them. Heck if the funding markets don't open up a little, we may still see banks RAISE their rates.

As you can see by Richard's post count – he da man. From what I've gathered so far, if he doesn't know it when it comes to financing and structuring, it's probably not worth knowing.
 

Spicy,

National Privacy Principles are laws that have been put in place for a reason. Whilst I'm glad (for Premium's sake) you haven't taken it as a breach, the fact remains it is.

I haven't used these people, haven't even heard of them before this forum but that alone would be enough for them to lose any chance they had of my business.

Whichever way you choose to go, I wish you luck

Thanks John – appreciate the info. Are there any other fees or charges associated with the services they provide? Commissions, spotters fees etc?

I saw this and was interested myself…

They say the site finds properties that are paying 6 – 10%… I would think this is a pretty broad margin to be painting as CF+ (depending on deposit, structure of course), but am interested in finding out if anyone has registered…

CF+ do still exist but you need to look hard, put a higher deposit up and structure it correctly. Patience, preparation and cash.

The first one is the hardest Marl

Ask questions, research research research, and use brokers and accountants for all you can get from them. You may have to pay for their services, but they'll save you more than they'll cost you in the long run.

Good luck!