Investment property

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Depends on where you plan to invest. For example I have a friend who bought property in Thailand https://tranio.com/thailand/ just because it is much cheaper there and started to rent it out on popular websites like booking and so on. From renting it for several days or weeks he gets much more money in compare if he is renting it for long term. Good thing about Thailand is that tourists go there all years around even when it is a winter season if I may call it like this. Did you think about this country?
 

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archiemoses

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Question peeps:

I have an investment property that's valued at $350,000~. I owe $180,000 on it

Currently renting a place as I moved states. The tenant's repayments are enough to cover the mortgage and I've worked out finances to be able to put an extra $1,000/fortnight into that mortgage.

Am I shooting myself in the foot when it comes to tax time? As my interest will be lower meaning I claim less at tax time. Wouldn't I be better off making the minimum payments and no extra payments? Am I better off putting the extra balance in my mortgage into my savings account then using that money to buy another property etc? My partner and I are 28, so I have time to expand etc

I'm thinking about buying another house, just not sure if it will be a "home" or investment property

Too me, it's like I'm paying 30-40% tax on my savings too (as it reduces my interest so my profit is greater)

Thanks
You should maximise your interest deductions which means offsetting the owner occupied property first. If you dont have a OO and only investment property then having the money in the offset account saves you interest, yes you can deduct less but you also arent paying tax on interest income on that cash which sits in a bank account at a crap cash rate.

Also, if you have an existing loan you cannot refinance to shift equity between OO and investment property loans (to maximise interest deductions). My accountant said this taints the loan and not allowed by the ATO. I didn't probe further so I'm not 100% on it.
 

compact72

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Depends on where you plan to invest. For example I have a friend who bought property in Thailand https://tranio.com/thailand/ just because it is much cheaper there and started to rent it out on popular websites like booking and so on. From renting it for several days or weeks he gets much more money in compare if he is renting it for long term. Good thing about Thailand is that tourists go there all years around even when it is a winter season if I may call it like this. Did you think about this country?
I was thinking of the U.S if it crashes again. It's insane how low the prices go and then climb. I may be shifting my focus. I live in QLD with my original OO in Victoria however now have a planned return to Victoria. Lifestyle is amazing in QLD, but my career opportunities are in Victoria. Only 28 year, so have a while to go

You should maximise your interest deductions which means offsetting the owner occupied property first. If you dont have a OO and only investment property then having the money in the offset account saves you interest, yes you can deduct less but you also arent paying tax on interest income on that cash which sits in a bank account at a crap cash rate.

Also, if you have an existing loan you cannot refinance to shift equity between OO and investment property loans (to maximise interest deductions). My accountant said this taints the loan and not allowed by the ATO. I didn't probe further so I'm not 100% on it.
Yeah I ended up taking my money out from the home loan and putting it into an offset account. I did speak to a bank about this, and the plan was to use the equity in the investment property to buy a house to live in. This would raise my investment loan allowing me to negative gear to my benefit. Thinking of options, even considering buying a business and growing that instead and move back into the investment property
 
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