Investment property advice.

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Hey guys
For the accounts out there.
If you own a home, and also have a rental property
Are you better to have the bank loan on the investment property or on the home you live in.
In terms of tax and the like.
 

Doogie

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Hey guys
For the accounts out there.
If you own a home, and also have a rental property
Are you better to have the bank loan on the investment property or on the home you live in.
In terms of tax and the like.
Negative gearing - your losses on the investment property are tax deductible but this is offset against any CGT. Then you have serviceability considerations because loans on investment are higher.

You probably want to see an accountant and get him to do some numbers. Saving a few $100's for decent advice by asking someone on the kennel - that might not be a solid long term decision.
 

Gene Krupa

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Being an expert on everything. :tonguewink: I think paying off the investment property first is better. Isn't interest rates higher on investment properties.
 

CrittaMagic69

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Being an expert on everything. :tonguewink: I think paying off the investment property first is better. Isn't interest rates higher on investment properties.
Yes but then you can't

 

EXPLORER

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Negative gearing - your losses on the investment property are tax deductible but this is offset against any CGT. Then you have serviceability considerations because loans on investment are higher.

You probably want to see an accountant and get him to do some numbers. Saving a few $100's for decent advice by asking someone on the kennel - that might not be a solid long term decision.
Yeah, might chat to my accountant.
 

Marki

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Most accounting advice you will get is to pay off your own home and keep the mortgage on the investment property as the interest is tax deductible.















The real question I want to ask is once you've positively geared your investment property and its paying itself off, do you buy another property to keep yourself in debt or do you pay off the investment loan, become debt free and enjoy life?

Once again, I bet the accountants tell you to keep yourself in debt while you are working so you can take advantage of negative gearing. They don't care if you like holidays or that sport car or if you wanna retire early and play golf 4 days a week.

There was a beauty of a story sent to me on LinkedIn about a fisherman who was content in life and wasn't interested in greedy ventures....

I'll post a link when I figure out how to do it.

It will put things in perspective...
 

Dakdah

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The interest on rental property is tax deductible, the interest on your principle place of residence (where you live) is not. Therefore pay out the non deductible loan first.
 

BlackJackBulldog

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There was a beauty of a story sent to me on LinkedIn about a fisherman who was content in life and wasn't interested in greedy ventures....

I'll post a link when I figure out how to do it.

It will put things in perspective...
images.jpeg
 

Noeasyday

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Definitely the home you live in, as others have said there's multiple tax benefits to property investment including interest paid.
Also look at a depreciation schedule if you don't already have one, it's a great tax deduction particularly on newer properties.
 

Mr Beast

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Definitely the home you live in, as others have said there's multiple tax benefits to property investment including interest paid.
Also look at a depreciation schedule if you don't already have one, it's a great tax deduction particularly on newer properties.
This.
I have both investment and owner occupied.
Seek out a good accountant.
 

Noeasyday

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This.
I have both investment and owner occupied.
Seek out a good accountant.
And a good real estate agent to tenant the place out. They're the ones who protect your investment for you.
 

DinkumDog

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The ‘businessman’ sounds like a consultant:

One day a shepherd attending his herd saw a BMW emerge from a dust cloud and head towards him. On pulling up, the shepherd could see the driver was a young man in a Brioni suit, Gucci shoes, Ray Ban sunglasses and YSL tie.

The driver leans out the window and says to the shepherd: ‘If I tell you exactly how many sheep you have in your herd, you’ll give me one’.

Amused, the shepherd looks at the yuppie and calmly says, ‘Sure’.

The yuppie parks his car, whips out his MacBook Pro, connects his iPhone as a hotspot, brings up a NASA satellite tracking page to get his exact coordinates before launching a 4K resolution scan of the area.

The young man exports the photo to an image processing lab and within seconds has an email back linking him to an SQL database via an ODBC connected Excel sheet.

From there he wirelessly prints a report, turns to the shepherd and says ‘You have 1586 sheep’.

‘That’s right’ says the shepherd.
‘Well, a deal is a deal, you can take one’.

The shepherd watches on with amusement as the yuppie struggles to get a sheep into the BMW so he says: ‘If I correctly guess the nature of your business, I get my sheep back’.

‘OK’ says the young man.
‘You’re a consultant’ says the shepherd.
‘That’s right!’ says the yuppie.
‘How did you know?’

‘Simple’ says the shepherd.
‘You turned up without being called and want to get paid for giving me an answer I already knew to a question I never asked’.

‘And it’s clear you know nothing about handling animals - so give me back my dog!’ :-).
 

Natboy

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Most accounting advice you will get is to pay off your own home and keep the mortgage on the investment property as the interest is tax deductible.















The real question I want to ask is once you've positively geared your investment property and its paying itself off, do you buy another property to keep yourself in debt or do you pay off the investment loan, become debt free and enjoy life?

Once again, I bet the accountants tell you to keep yourself in debt while you are working so you can take advantage of negative gearing. They don't care if you like holidays or that sport car or if you wanna retire early and play golf 4 days a week.

There was a beauty of a story sent to me on LinkedIn about a fisherman who was content in life and wasn't interested in greedy ventures....

I'll post a link when I figure out how to do it.

It will put things in perspective...
Buy as many properties as you can afford in about 6 months when more people come off fixed loans and can’t afford to keep their properties. The fishing story is cute but unfortunately we live in a country where too many people want to sit on their arse and let hard working people catch fish for them and successful people aka the big end of town are the enemy of the virtue signaling government (unless they let you use their private helicopter like Lindsay Fox).

And yes speak to a good accountant. Not a dodgy one. Pay your principal place of residence off first
 
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