I am in a quandry. And this is my first post. I must say that the information given here appears to be given freely and looks to be useful. That being said, I consider myself a little naive when it comes to tax and structuring debt. I also understand that I value information at exactly the price I pay for it - in this case nothing!
I have my own home with P&I loan of around $115k on property worth around $250k. We have also a IO loan of arond 300k on 350k of property. At the moment, the investment properties just cover themselves nicely so there are no cashflow issues with them.
My wife and I have found a nice property worth around $310k that we'd like to move into.
We would prefer to keep the first home, however because we can only deduct the interest now on the outstanding balance (115k) should we rent the property out. Obviously, I'd like to deduct as much interest as I can on the investment properties, however, I am fully aware that I cannot gear our current house (perhaps soon to be IP) up to decrease the mortgage on the new house.
I guess the question I want to ask is (I am afraid you're gonna have to 'tell it to me like I'm a two year old'), what options do I have to minimise the cost of living in the new house?
If it comes to having to sell the house I am currently in, I guess that's an option we would consider, albeit reluctantly.
dj.
I have my own home with P&I loan of around $115k on property worth around $250k. We have also a IO loan of arond 300k on 350k of property. At the moment, the investment properties just cover themselves nicely so there are no cashflow issues with them.
My wife and I have found a nice property worth around $310k that we'd like to move into.
We would prefer to keep the first home, however because we can only deduct the interest now on the outstanding balance (115k) should we rent the property out. Obviously, I'd like to deduct as much interest as I can on the investment properties, however, I am fully aware that I cannot gear our current house (perhaps soon to be IP) up to decrease the mortgage on the new house.
I guess the question I want to ask is (I am afraid you're gonna have to 'tell it to me like I'm a two year old'), what options do I have to minimise the cost of living in the new house?
If it comes to having to sell the house I am currently in, I guess that's an option we would consider, albeit reluctantly.
dj.
