- Originally posted by summer:
I didn’t know about a quanity surveyor until i joined this site i will look into it thanks for the advice. I was just leaving it to my accountant (although he is very good.)
While your accountant may be ‘good’ he is not qualified to calculate your building depreciation allowance if the property is post 1987.
As such you may be missing either a 2.5% or 4% building construction cost (per annum) depending upon the age of the building. This can add up to big dollars.
Just a question on paying down a loan on an Ip so you can then get more equity to service more IP loans.
I thought this was the best way……eg.
Unless you are pumping considerable sums of money into the loan then the early years of a loan all repayments are largely the interest component. It is only in the middle/later years when significant inroads are made into the principle.
A well researched property is likely to grow faster in value, this realising equity this way, than you can by paying down the principle.
I borrowed my MAX but it is down to currently 45% debt(am thinking i can borrow more now in a IO loan) The problem with me is I have equity but they say that my income can’t service the debt. Which is why i was putting money into to reducing the principle of my IP so then i could service more debt. is this good?
I was thinking of approching the bank soon and applying for a Interest only loan on another IP I would just pay the interest of the new IP and then continue to put my remaining money in my first IP paying down the loan as much as possible.
I would approach a broker and they will/should be able to match your position with a ‘friendlier’ bank. A broker has access to a number of lenders, each with different serviceability calculators.
What is everyones thoughts on that strategy. I own my own PROR. I would like to eventually have as many IP’s as possible![cap]
There is nothing wrong with the strategy at all – it is a question of what is right for you. We have been leap frogging (as Peter Spann calls it) for a ‘few’ years now with good growth results and only using Interest Only loans.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Thanks for advice i am going to get a quanity surveryer done as the property is 1930’s.
Originally posted by summer:Thanks for advice i am going to get a quanity surveryer done as the property is 1930’s.
Hi Summer,
Probably wont be worth it. If the building was built in the 1930’s there will be no building depreciation left aprt from any recent renovations that may have been done. Suggest you PM Scott AKA ‘depreciator’ for some expert guidance before moving much further.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Everything in the house will have a current value that can be depreciated and a good quantity surveyor should be able to sort that out.
I have had schedules done on old homes and found that the councils keep records of permit applications etc… which has pointed out more recent renovations and additions. Its always been worthwhile for me.MJK
I disagree with Derek regarding quantity surveyors or depreciation specialists, we have 3 houses in tassie which only cost us 72k 88k and 105k respectively.
Always get a depreciation schedule as we founbd whti these three, the one that cost the most isnt the best for depreciation. The 72k house got us 3k first year, 105k got us 2300 and the 88k got us only 987 first year. All are different as most investments are so always get a schedule done as even if you only get a starting point of $900 year one which deminishes, it costs you $600 in total.
Ok you make 300 first year 270 next year etc etc. No biggie, its 300 you dont have to find for tax, the $600 paid is a tax deduct as well so its a win win. ALWAYS get a schedule done no matter what age or condition, you may be surprised.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!
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