If I have a investment property with a loan of $120,000 for 2 properties worth about $1million, will it be better paying off this loan? The rent more than covers for this.
Because if I pay off the loan, then no money is wasted on paying interests to the bank.
If there is no loan, then more rental income becomes taxable at 30%. My friend is telling me, if I earn $1, I only pay about 30c. But if I use the whole $1 to pay interest to the bank, I get nothing. Makes sense?
My accountant is telling me to keep a small loan balance, for tax purposes....
Because if I pay off the loan, then no money is wasted on paying interests to the bank.
If there is no loan, then more rental income becomes taxable at 30%. My friend is telling me, if I earn $1, I only pay about 30c. But if I use the whole $1 to pay interest to the bank, I get nothing. Makes sense?
My accountant is telling me to keep a small loan balance, for tax purposes....