All Topics / Help Needed! / HELP WITH A LOAN FOR IP.
Hi All,
I would like your thoughts on my situation.I am looking to buy another investment property.
Current Situation – own home outright. Have one IP. Value $460,000, redraw $121,000. current repayments $808p/m.What should I do, to make my portfolio more tax effictive?
Use $121k and buy another property? Leave $121k and borrow 100%? or Other?
Looking foeard to hearing from you.
AV
Hi there
“Tax effective”: I am assuming you mean increase you tax deductions to lower your tax that you are paying from other income sources.
Best way to increase your tax deductions is by claiming depreciation since there is no out of pocket expense. Next best way is to increase your interest payments.
If you can borrow 100% and it suits your investment strategy, then borrowing 100% will maximise your tax deduction.
Cheers
Andrew
superAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auTo help with things stop putting extra into redraw and have an offset account instead. If you’re paying principal and interest turn the loan into interest only.
I won’t comment on the tax specifics but if you redraw money to go towards IP purchasing costs it gets very messy – get tax advice on this. End goal may be to leave the $121k in there and draw on the equity via a loan and not redraw.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
Hi Both, Thanks for your input… both makes sence!
Cheers
AdrianHi AV
Normal approach is to access equity in your existing property to fund the deposit/costs on the next.
Agree with above – best to use IO with an offset to avoid future taxation implications of redraw.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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