Aussie Home Loans blog

Get the most out of your home loan.

  • Home
  • Buying Your Property
  • Money Smarts
  • Maintaining Your Property
  • Ask John Symond
  • Life and Style
  • Customer Stories

Category Results

Tag Results

Author Diane Leonard Results

Meet with a Broker

Why Not Buy Two? One to Live In and One to Rent Out

December 29, 2011 By Diane Leonard 1 Comment

Two Houses | Photo: oriba

BUYING a home to live in and an investment property at the same time can be an effective way of leveraging equity, and getting a tax benefit at the same time.

Aussie broker Lindsay Rogers has a wealth of experience in the industry, and while first and foremost he recommends seeking any tax advice from an accountant, he says this tactic can be beneficial.

“Most accountants would advise that interest on the investment property is tax deductable whereas interest on an owner occupied property isn’t, and as a result the owner occupied property loan would be Principal & Interest while the investment property loan would be interest only,” he said.

“The idea is to reduce the non tax effective debt (the owner occupied property loan) and keep the tax effective debt (investment property debt) at a maximum.”

Mr Rogers recently helped clients of his in precisely the same scenario, after they netted $220,000 from the sale of their home.

“They decided that they wanted to purchase a new home and an investment property to help build their wealth for their retirement,” he said.

“After meeting with them and discussing their goals I worked out some figures and suggested that they could purchase a new home for $600,000.

“They needed to keep $26,000 for their cost (stamp duty, transfer fees and legal representative fees) of purchasing their owner occupied property and $194,000 was to be used as a deposit for an owner occupied loan of $406,000.

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

Mr Rogers said the main benefit of the scenario was by purchasing together or purchasing an investment property when you already have an owner occupied property gives you an advantage of leveraging equity in the owner occupied property to borrow the full purchase price of the investment and costs and maximise the tax effectiveness.”

“Again, I would urge anyone thinking about it to get any tax advice from their accountant.”

Related posts:

love where you liveWhat if you love your lifestyle but can’t afford to buy where you live? High-rise Beach Condos | Photo: danjlymanThe 10 Worst Places to Buy Investment Properties Aussie audioThe worst home in the best street or the best home in the worst street? Buying on a budget below $350,000

December 29, 2011 Diane Leonard1 Comment 

Filed Under: Buying Your Property Tagged With: buy-or-rent, first-home-buyer, investment-property

Meet with a Broker
Property Guides
Tools and Calculators
Repayment Calculator

About Diane Leonard

Diane is the digital marketing manager at Aussie Home Loans. She is a self-professed geek and lover of all things digital. She continues to search high and low for the healthier version of herself, and when she can fit it in, you'll find her preoccupied with her cat - Jez, buzzing around Sydney on her scooter or attempting to learn a new tune on her ukulele.

  • Pingback: Why Not Buy Two? One to Live In and One to Rent Out()

Search the Aussie Blog

Borrowing Calculator
Repayment Calculator
Property Guides
Meet with a Broker

Connect with us

Popular Posts

  • Buying Your First Home With Little or No Deposit Buying Your First Home With Little or No Deposit With the property prices where they are today there has...
  • If you’re thinking that it could be a good time to buy your first home but aren’t sure about how you can get your foot onto the property ladder or if you have saved enough

    More...
  • 7 easy ways to add ‘wow’ to your outdoor area (and value to your home) 7 easy ways to add ‘wow’ to your outdoor area (and value to your home) Outdoor space is highly prized by home buyers, but ther...
  • Outdoor space is highly prized by home buyers, but there’s no need to spend a fortune on professional landscaping. Our seven simple projects can add value to your lifestyle – and your home. Don’t underestimate

    More...
  • Five reasons you may transfer home ownership Five reasons you may transfer home ownership While selling on the open market is an obvious one, the...
  • While selling on the open market is an obvious one, there are several other reasons why you may be transferring home ownership. Here are five of these reasons, plus guidance on your legal and financial

    More...
  • House number numerology: Do you live in a lucky house? House number numerology: Do you live in a lucky house? For numerologists, a property’s number can say a lot ab...
  • Discover what the best house numbers are, according to house number numerology. When you’re in the market for a new home or investment property, there are plenty of boxes to tick - large kitchen, off-street parking,

    More...
  • Construction loans and how they work Construction loans and how they work With residential property prices rising across our capi...
  • With residential property prices rising across our capital cities, it’s no surprise that we’re also seeing a rise in construction loans as savvy home owners and buyers look for a cheaper alternative to buying and

    More...
The fine print Moderation Policy

Aussie is a trade mark of AHL Investments Pty Ltd. Aussie is a subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. © 2019 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786.