Many Benefits Of Investment Property and Home Loan Offer

Investing in a home to live in and an investment property at the same time is definitely a powerful way of profiting from assets, and having a tax benefit while doing so.

Your Central Coast mortgage brokers have a wealth of expertise in the marketplace, and even though first and foremost they advise looking for any tax guidance through an financial advisor, she says this tactic could be advantageous.

A lot of accountants would likely propose that interest on the investment property will be tax deductible however interest on an owner occupied property isn’t, and as a result the owner occupied property loan will be Principal & Interest and the investment property loan would be interest only,” she said".

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The strategy is usually to lessen the actual non tax efficient debt (the owner occupied property loan) whilst keeping the tax efficient debt (investment property debt) within a maximum.”

Central Coast mortgage brokers recently assisted clients in the very same scenario, right after they netted $220,000 through the sale of their own home.

“They decided that they planned to purchase a new home along with an investment property to help build up their wealth for their retirement,” she said.

Following meeting them and going over their goals and objectives I strived out some numbers and recommended that they could buy a new home for $500,000.

The clients found it necessary to keep around $26,000 for their stamp duty, relocate fees as well as legal fees of purchasing their owner occupied property and around $194,000 was to be part of a deposit for an owner occupied loan.

The investment loan would be $312,000 to buy an investment property for $300,000 the $12,000 covered the stamp duty, transfer fees and legal fees.

The chief benefit of this scenario is by purchasing together or acquiring an investment property loan when you currently have an owner occupied property provides you with an advantage of profiting from equity in the owner occupied property to borrow the entire purchase price of the investment and costs and maximize the tax effectiveness.

I would certainly urge anyone thinking about it to get (blank) tax advice using their accountant.