Hey guys, I have been paying off my first Investment property for 4 months now. Iv only been paying the minimum amount on the loan as iv had other things to buy and just havent had the money..
My question is, where do I go from here ?
Do I put as much money as I can spare into paying this one off or do I start saving for the next one ?
It is negitave geared but not by much, is there any tricks to make it possitive geared other than increassing the rent ?Details on my property are :-
2Bedroom unit
Purchase price – $125,000
Loan remaining – $114,000
Rent income – $310 a fortnight
Loan repayments – $403 a fortnightAny advice on helping me get the most out of this property would be greatly appriciated
Cheers…
Hey Bez,
Do you have an interest only loan on the property? If you currently have a principal and interest loan, changing to interest only would decrease repayments and possibly move the property into the positive.
Also, how old is the unit? I am guessing it is reasonably old going by the price but you may still be able to depreciate some items to gain tax benefits that could also move the property into the positive.
Although you asked for other methods beside increasing rent, this always means more money in your pocket. It would be beneficial to increase the rent which can be achieved by presenting the property a little better, maybe by means of a new coat of paint, new handles on the cupboards, etc. You can go crazy with renos if you like but even small changes can sometimes make the property alot more appealing which in turn can allow you to demand more rent and maybe move the property into a positive geared investment.
I hope this at least gets you thinking..
Cheers,
Thanks dannads,
The loan payments are principal & interest, I will look into how much repayments would be if it was interest only..
The house is about 30 years old.Thanks for the advice
Bez wrote:Do I put as much money as I can spare into paying this one off or do I start saving for the next one ?…Hello Bez
Assuming you have no non tax deductible debt which you should pay off first what I would do would be to have an offset account against this loan and put everything I earn into it. This gives you the best of both worlds.
Cheers
ElkaBez wrote:Hey guys, I have been paying off my first Investment property for 4 months now. Iv only been paying the minimum amount on the loan as iv had other things to buy and just havent had the money..
My question is, where do I go from here ?
Do I put as much money as I can spare into paying this one off or do I start saving for the next one ?
It is negitave geared but not by much, is there any tricks to make it possitive geared other than increassing the rent ?Details on my property are :-
2Bedroom unit
Purchase price – $125,000
Loan remaining – $114,000
Rent income – $310 a fortnight
Loan repayments – $403 a fortnightAny advice on helping me get the most out of this property would be greatly appriciated
Cheers…
Hi Bez, just on about your PI, i dont think you can claim negative gearing for this. If its IP then you can claim everything available……….depreciation on building and fixture/fittings-2.5% after 1987, negative gearing, rental income, look for an accountant whose experience in property investments. Check your capital growth by re-valueing your property. A great comment made by Elka is beneficial for you………………..100% offset account will account for your interest.
Property Price 100% Offset Account
$125kMorgage Loan Remaining 11k Interest Free
$114k
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