How to get the finance and accounts setup right?

Hi guys,

I want to run down my situation and let people make comment on what I should do moving forward.
My wife have and 2 properties.
First Property we live in and it is worth 340,000 with 170,000 owing on the loan and the second is an investment property (negatively geared) which is worth 440,000 and owing 370,000.
The houses are in both our names and what we would like to do is begin investing into more properties.

My questions are:
1. Are there tax benefits of using both properties equity to buy a third?
2. Should we be restructuring our current accounts to get the most out of tax?
3. What type of loan would be best applicable for us?

Any help would be greatly appreciated.

Cheers,
Pande

1. Tax benefits depend on the use of the property and not the security.
2. Yes. You could make some improvements and save more tax.
3. You would need a few different ones. IO for the investment, IO/PI for the main residence with a 100% offset account attached. An interest free credit card with points and a LOC for spare equity on the main residence.

Terryw
Finance Broker
Solicitor

When you are restructuring as Terry has suggested you might also be wise to uncross the 2 properties as looking at the numbers you have presented i can only assume the are tied together. 

Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888
Residential Mortgage Broker providing structured home loan advice for investors and owner occupiers all over Australia.
Thinking of buying your next investment property using a SMSF. Email me for a copy of my SMSF EBook.

The property is the security. I think he means the purpose of funds :-)

e.g. if the purpose of the property is investment - and the purpose of funds in personal - the later is the more important.

Ooops.

Terryw
Finance Broker
Solicitor

We knew what you meant :-)

Terry first error you have made in 9 years and 8572 posts we will let you off.

Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888
Residential Mortgage Broker providing structured home loan advice for investors and owner occupiers all over Australia.
Thinking of buying your next investment property using a SMSF. Email me for a copy of my SMSF EBook.

RIch,

If you now make one as well, then I forecast the property market to crash at least 20% by the end of the year...

Regards,
YI

"Knowledge is Power"

Wow better watch myself.

Next thing i will be telling everyone how good cross collateralising is.

Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888
Residential Mortgage Broker providing structured home loan advice for investors and owner occupiers all over Australia.
Thinking of buying your next investment property using a SMSF. Email me for a copy of my SMSF EBook.

If I'm not mistaken, someone already took care of that on your behalf in another forum :)

Regards,
YI

"Knowledge is Power"

Ah yes, cross collateralisation. My topic. I knew I'd ruffle a few feathers. Yes yes yes. Stand by my claim that you can settle a deal with no supporting paperwork through relationship management Chanels - customers can even get their docs printed while they wait at the first appointment - if rp data vL stacks up. - Like to see you try and settle a deal wihin a dew days when equity is spread between a bunch of non banks...

Hi Banker,

I wasn't having a go at the X Coll discussion, just making a comment.

I often get finance arranged for clients within a couple of days, so I agree with your point on relationship management.

Once in a blue moon I actually attend a settlement myself depending on the client and the urgency!

Regards,
YI

"Knowledge is Power"

Guys lets agree to disagree.

The next thing is The Mortgage Detective will be back (think he only last 3 weeks) and we can re-open other cans of worms.

Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888
Residential Mortgage Broker providing structured home loan advice for investors and owner occupiers all over Australia.
Thinking of buying your next investment property using a SMSF. Email me for a copy of my SMSF EBook.

Who is the Mortgage Detective? He sounds smart

Regards,
YI

"Knowledge is Power"

A member who arrived trying to sell his book and services and spent the 3 weeks he was here trying to argue every post Terry and I answered telling members to protect themselves.

Claimed he was the Mortgage Detective but when i queries the name (as it is used by a Mortgage Broking firm in ACT) he couldnt come up with an answer. Left here arrived over at Sommersoft for a few weeks and then thankfully disappeared.

Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888
Residential Mortgage Broker providing structured home loan advice for investors and owner occupiers all over Australia.
Thinking of buying your next investment property using a SMSF. Email me for a copy of my SMSF EBook.

Intrest free credit card  yes please !!

Yes, me too - but they are only interest free for the month, then if you don't pay in full on time.....

Terryw
Finance Broker
Solicitor

They are an interest free product for anyone with a full balance direct debit option (assuming you don't go over the limit!)

All mine does it pay utility bills etc so I can leave the cash sitting in my offset account for an extra 30 days or so - And apparently I receive reward points for using the bank's money to save myself interest?

Used correctly and to their full potential, the credit card is a wonderful thing, and can be very beneficial to anyone with any kind of debt.

Anyhow... way off topic - Sorry :)

Regards,
YI

"Knowledge is Power"

Imagine the benefits when you have 100 properties and you are paying rates etc = bonus interest saved off your loans and think of all the points.

Terryw
Finance Broker
Solicitor