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Forgot to add, might be worth considering the recent article about interest rates in the future
http://www.smh.com.au/articles/2003/08/25/1061663735507.htmlRegards
Teylu
Depending also if your principle place of residence has a mortgage (as mine does), I have opted to take IO loans on IP’s because
1/ the interest is tax deductible against any profits or otherwise your income. Paying principle on top of this increases your profit (as less cost of interest on the IP) and hence your tax bill
2/ Any left over cash (which it is assumed you will have if you are considering P&I will be better put into your loan for the property you live in as the interest is not tax deductible and these extra payments will reduce your non dedcutible interest bill each year.
3/ This means you can take out a no frills lower cost I/O loans for your IP’s (without extra features that generally add to the costs/fees associated with them)Of course, check with your accountant on the best structure for you.
Regards[8D]
Thanks Anastasia
Yes you are correct and that is why I am basing my analysis on 42 weeks in the year. Thankyou for the story as this is exactly what I am concerned (and somewhat less now) about – it’s good to see that they have not had trouble finding the tenants. Can also see the benefit in advertising and finding tenants yourself as the costs are nearly 10K per year for management, electricity (yes, consumption is paid by the vendor), rates, body corporate etc etc…. At least there s a portion of this that I could insource to myself if margins grew tight.
Thanks again… Online
[8D] Time to put the shades on for sunny QLD
