All Topics / Help Needed! / HELP WITH A LOAN FOR IP.

Viewing 5 posts - 1 through 5 (of 5 total)
  • Profile photo of AdrianAdrian
    Participant
    @adrianvla
    Join Date: 2014
    Post Count: 7

    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

    Profile photo of superAndrewsuperAndrew
    Participant
    @superandrew
    Join Date: 2014
    Post Count: 188

    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.au

    Profile photo of Kinnon BellKinnon Bell
    Participant
    @kinnon
    Join Date: 2014
    Post Count: 151

    To 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 Me

    Mortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.

    Profile photo of AdrianAdrian
    Participant
    @adrianvla
    Join Date: 2014
    Post Count: 7

    Hi Both, Thanks for your input… both makes sence!

    Cheers
    Adrian

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hi 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 Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

Viewing 5 posts - 1 through 5 (of 5 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.