Hi,
My partner and I currently live in a 2×1 apartment in Maylands, Perth which I bought in 2005 for $150k, currently there is $120k remaining on the loan (which is fixed at 6.59% until end of 2008).
We have got sick of apartment life and are now in the process of purchasing together a 4×2 house in Wattle Grove to live in for $410k (expected loan amount 390k) with the intention of renting out the Maylands apartment.
I'm currently paying around $220 per week for the apartment loan, and expect rent return to be around $250 per week.
A few questions…
– Do I need to change the apartment loan to an 'Investment Loan' or can I keep it like it is?
– Should I change the apartment loan to 'interest only'? I realise ppl do this since you only get tax benefits for the interest paid on an investment, but isn't it better to get the loan paid off quicker?
– Should I put the apartment in both our names? My partner earns less than me, are there any tax benefits?
– The apartment has a bit of 'maintenance' needed (eg cracks in bathroom plaster) is it worth fixing these things, or better to leave it 'as is' (with possibly slightly lower rental return)– Are we doing the right thing? It seems like we are since the value has risen greatly since I bought the apartment, so the high rents will almost pay for the loan + other costs, and I predict rents to rise even more, but with high interest rates we'll be paying a lot to service the new house loan.
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