Say to borrow a $1000 at 5.95% - costs me $59.50 each year in interest (interest only loan).
Less tax (at top marginal rate) really costs me about $30.00
So I borrow and spend $1000 on renovation of a recent IP purchase This gives me a depreciation (say 10% for carpet and lino). ...allowing $100 of my regular income so then I am $50 in front each year less the $30.
Also the added renovation I hope to maximise the rent.
Is my logic right?
Scott
Less tax (at top marginal rate) really costs me about $30.00
So I borrow and spend $1000 on renovation of a recent IP purchase This gives me a depreciation (say 10% for carpet and lino). ...allowing $100 of my regular income so then I am $50 in front each year less the $30.
Also the added renovation I hope to maximise the rent.
Is my logic right?
Scott