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G’day Mick,
We have a split LOC for our mortgage, one side personal home loan the other investment. We have 3 IP’s and have played around with different management strategies. One self managed where we had the rent paid into the home side and all expenses payed out of the investment side, One semi- managed where an agent collected rent but paid no expenses, these came out of the investment side of the LOC and one fully managed by an agent(so just net income was deposited into our home loan side – after expenses where taken out.)
We have claimed all interest on the expenses we have payed out of our LOC investment side now for the past 2/3 years and have used two accountants through that period, neither having a problem with claim.
We never claimed the interest on the interest payment though with the payment sliding across from one side to the other each month.
A couple of observations:
Once you have more than one IP’s expenses coming out of the same LOC you have to be diligent on tracking the costs for each one.
With “borrowing” the costs out of your LOC it’s very easy to let them blow out your credit line so watch your personal income/expenses.
If your running the expense of more than one property out of a LOC and not paying them off it gets difficult to calculate and split the interest especially on past year losses that our still sitting in you LOC.
Simon
