Hi,
I just need a little advice as I am rather confused about my situation and I am finding it diffcult to find out the correct answer.
Basically we are wanting to upgrade to a bigger house and were hoping to keep this house as an IP. We owe $145,000 and this house is worth about $340,000. We have about $26,000 in redraw available as we are making double repayments at the moment.
I was under the assumption that it would be best to increase our existing loan up to about 80% and the extra funds could be used as the deposit on our next property. Then we would purchase a new property and use those funds as the deposit and then we would change the initial loan to an investment loan and make it IO and then we could negative gear the IP (current home). And then the extra funds from the rent could be used to pay down our owner occupied home. We will get about $300 rent a week.
This is what we were working off and had discussed with our MB (who doesnt speak very good english). I then approached another MB this week or advised us that we will not be able to negative gear this property as it goes off the orginal loan amount and thus it will be positive geared and maybe we should consider selling this house.
So now I am very confused. All I know is we need a bigger house and would love to have an investment property.
Am I completely on the wrong path, does anyone have any suggestions as to how we could structure things. I honestly have no idea what is the right way to go about things.
Thanks in advance
Michelle
I just need a little advice as I am rather confused about my situation and I am finding it diffcult to find out the correct answer.
Basically we are wanting to upgrade to a bigger house and were hoping to keep this house as an IP. We owe $145,000 and this house is worth about $340,000. We have about $26,000 in redraw available as we are making double repayments at the moment.
I was under the assumption that it would be best to increase our existing loan up to about 80% and the extra funds could be used as the deposit on our next property. Then we would purchase a new property and use those funds as the deposit and then we would change the initial loan to an investment loan and make it IO and then we could negative gear the IP (current home). And then the extra funds from the rent could be used to pay down our owner occupied home. We will get about $300 rent a week.
This is what we were working off and had discussed with our MB (who doesnt speak very good english). I then approached another MB this week or advised us that we will not be able to negative gear this property as it goes off the orginal loan amount and thus it will be positive geared and maybe we should consider selling this house.
So now I am very confused. All I know is we need a bigger house and would love to have an investment property.
Am I completely on the wrong path, does anyone have any suggestions as to how we could structure things. I honestly have no idea what is the right way to go about things.
Thanks in advance
Michelle