Hey guys I have two things I would like help with.
Firstly is I’m in the middle of buying my first property which is a brand new unit so I’ve applied for the great start grant and stamp duty exemption as it equates to about $28k. My question is since I’m keen to rent this property out and I have to live in the property for a certain period of time to get this funding from the goverment is there any way around it to still rent it out or will I just have to live for there the 6 months or a year?
Secondly what’s my best course of action to pay off the loan? My repayments are only $357 a week and I earn about four times that with minimal living costs. Am I better off paying the loan off itself? Or saving the money and putting it into an offset account?
Thank you for your time.
Why do you want to pay off the loan? Why not use IO with an offset account and save the same interest but keep funds available for private nnon deductible debt/
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Follow your own advice and save the money in an offset with an interest only loan.
It has the same nett effect with the advantage of retaining the cash in you coffers and not the banks. As well as preserving the principal loan amount so when you rent it out you are minimizing your tax by offsetting the rent with interest payments on the loan.
Simple but highly effective strategy right there.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
Interest only with offset. That way if you ever want to withdraw those funds (for a holiday, for a medical expense, or to fund deposits on further properties) you can whip that money out without asking anyone’s permission.
If you pay the loan down, to get your “equity” back out again you must apply to do so. This is a borrowing event. You will be credit checked and are not assured of a “yes”.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Not really Jac – redraw can be done without permission with most banks.
The main issue is the tax consequences as redrawing from a loan = new borrowings for tax purposes.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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