Skip to content
  • Home
  • Services
    • Guarantor Loans
    • Debt Consolidation
    • Home Loan Redraw and Cash Out
    • Home Loan Refinancing
    • LMI Waiver for Financial Professionals
    • LMI Waiver for Health and Medical Professionals
    • LMI Waiver for Legal Professionals
    • Mortgages for Doctors
  • Calculators
    • Borrowing Power Calculator
    • Extra Repayment Calculator
    • Home Loan Offset Calculator
    • How Long To Repay Calculator
    • Income Annualisation Calculator
    • Income Tax Calculator
    • Interest-Only Mortgage Calculator
    • Loan Repayment Calculator
    • Lump Sum Repayment Calculator
    • Mortgage Switching Calculator
    • Split Loan Calculator
    • Stamp Duty Calculator
Menu
  • Home
  • Services
    • Guarantor Loans
    • Debt Consolidation
    • Home Loan Redraw and Cash Out
    • Home Loan Refinancing
    • LMI Waiver for Financial Professionals
    • LMI Waiver for Health and Medical Professionals
    • LMI Waiver for Legal Professionals
    • Mortgages for Doctors
  • Calculators
    • Borrowing Power Calculator
    • Extra Repayment Calculator
    • Home Loan Offset Calculator
    • How Long To Repay Calculator
    • Income Annualisation Calculator
    • Income Tax Calculator
    • Interest-Only Mortgage Calculator
    • Loan Repayment Calculator
    • Lump Sum Repayment Calculator
    • Mortgage Switching Calculator
    • Split Loan Calculator
    • Stamp Duty Calculator
the mortgage agency logo
  • About
  • Resources
    • Blog
    • Podcast
  • Contact
Menu
  • About
  • Resources
    • Blog
    • Podcast
  • Contact
the mortgage agency logo
  • About
  • Calculators
    • Borrowing Power Calculator
    • Extra Repayment Calculator
    • Home Loan Offset Calculator
    • How Long To Repay Calculator
    • Income Annualisation Calculator
    • Income Tax Calculator
    • Interest-Only Mortgage Calculator
    • Loan Repayment Calculator
    • Lump Sum Repayment Calculator
    • Mortgage Switching Calculator
    • Split Loan Calculator
    • Stamp Duty Calculator
  • Contact
  • Services
    • Home Loan Refinancing
    • LMI Waiver for Financial Professionals
    • LMI Waiver for Health and Medical Professionals
    • LMI Waiver for Legal Professionals
    • Mortgages for Doctors
  • Resources
    • Blog
    • Podcast
Menu
  • About
  • Calculators
    • Borrowing Power Calculator
    • Extra Repayment Calculator
    • Home Loan Offset Calculator
    • How Long To Repay Calculator
    • Income Annualisation Calculator
    • Income Tax Calculator
    • Interest-Only Mortgage Calculator
    • Loan Repayment Calculator
    • Lump Sum Repayment Calculator
    • Mortgage Switching Calculator
    • Split Loan Calculator
    • Stamp Duty Calculator
  • Contact
  • Services
    • Home Loan Refinancing
    • LMI Waiver for Financial Professionals
    • LMI Waiver for Health and Medical Professionals
    • LMI Waiver for Legal Professionals
    • Mortgages for Doctors
  • Resources
    • Blog
    • Podcast
  • Book in your Free discovery session now!
Uncategorized
/
August 25, 2020

Turning Your Home Into an Investment Property

Tony Xia

SHARE

Not all homeowners who are upgrading to a bigger house need to sell off their current property. The thought and wonder on how they could potentially keep their current home and turn it into an investment property would be on the back of their mind.

You can keep your property and upgrade to your new home without incurring a loss if you don’t need a fast sale in order to buy your new home.

If your home is an asset that’s doing well, the only time you should be selling is when you need to, why not own both properties to start your property portfolio journey if it’s viable?

By placing some strategies in place, homeowners can create wealth through the capital growth of their property/ies, this could be an integral part of their retirement planning on building up your nest egg.

Mortgage Strategy

Through an effective mortgage strategy, you can potentially have a positive cash flow Investment property once your home is converted into an investment.

A good mortgage strategy will also capture the tax benefits on your investment, low-interest rate, correct structure and a better chance of improving your wealth. Without a mortgage strategy, selling of the asset unnecessarily may turn costly in the long run.

As each individual has different needs and goals, there are several mortgage strategies that can be applied when turning your home into an investment property based on your circumstance.

Your mortgage and property plan should always be long term, there’s no such thing as overnight success in property.

Structure/Benefits

Having a positive geared investment property is like having surplus money, you can keep the profits in an offset account to reduce any non-taxable debt such as your owner occupied home and maintain the full tax deductions of the investment to minimise your tax payable.

However a negative geared property is also not a bad thing if you’re able to afford it and the property has the potential of substantial growth.

Put Extra Repayments Aside

It’s not always a good thing in making extra repayments into the loan if you’re planning to convert it into an investment. You would rather make minimum repayments and ensure the extra repayments are in an owner occupied offset account.

This is to maintain the full tax deductions once the home is converted into an investment and its more appropriate to transfer the extra funds to your new Owner Occupied offset account instead as the interest expense is not tax-deductible when you are occupying the property so this helps to reduce the interest expense.

If you made extra repayments into your home loan, you cannot redraw on the original home loan and put it forward to your new property and also claim the full loan ( which is now and investment loan) as tax deductible,  This redraw cannot be claimed as a tax-deductible.

Whether interest is deductible or not is dependent on where it originated from and what is the “usage” for it.

Put it Simply, the “purpose” of the funds used, determines if it’s tax deductible or not.

About Tony Xia

Having worked in the customer service and finance industry since 2011, our Director Tony Xia and his team’s highest priority is to cultivate a long-lasting relationship with clients based on trust and respect at The Mortgage Agency.

Related

who will give me a loan when no one else

Roadmap to Financial Assistance: Who Will Give Me a Loan When No One Else Will?

November 27, 2023
/
Home Loan Tips, Loan Tips
Tony Xia
two men shaking hands and a miniature house in between

Does a Low LVR Mortgage Mandate LMI?

November 15, 2023
/
Home Loan Tips
Tony Xia
man signing documents

What Does Conditional Approval Mean?

November 10, 2023
/
Home Loan Tips
Tony Xia

“Off-the-Plan” Meaning Explained

November 8, 2023
/
Property Investment Strategy
Tony Xia

How to Calculate Equity in Home (Step By Step)

November 8, 2023
/
Equity Loan, Home Loan Tips, Uncategorized
Tony Xia
tax on investment property

How To Master Tax on Investment Property Obligations

October 31, 2023
/
Investment Property Loan, Property Investment Strategy
Tony Xia
dpcument signing

Principal and Interest vs Interest-Only: Your Repayment Options

October 19, 2023
/
Loan Tips
Tony Xia
couple looking at documents

Home Loans for Self-Employed Individuals

October 18, 2023
/
Home Loans for Professionals
Tony Xia
woman holding credit cards in frustration

Bad Credit Loan: Solution for Urgent Financial Needs?

October 18, 2023
/
Loan Tips
Tony Xia
high rise condominium building with pool

What are Strata Fees? Here’s Everything You Need to Know

October 12, 2023
/
Uncategorized
Tony Xia
who will give me a loan when no one else

Roadmap to Financial Assistance: Who Will Give Me a Loan When No One Else Will?

November 27, 2023
/
Home Loan Tips, Loan Tips
Tony Xia
two men shaking hands and a miniature house in between

Does a Low LVR Mortgage Mandate LMI?

November 15, 2023
/
Home Loan Tips
Tony Xia
man signing documents

What Does Conditional Approval Mean?

November 10, 2023
/
Home Loan Tips
Tony Xia

“Off-the-Plan” Meaning Explained

November 8, 2023
/
Property Investment Strategy
Tony Xia

How to Calculate Equity in Home (Step By Step)

November 8, 2023
/
Equity Loan, Home Loan Tips, Uncategorized
Tony Xia
tax on investment property

How To Master Tax on Investment Property Obligations

October 31, 2023
/
Investment Property Loan, Property Investment Strategy
Tony Xia
Preferred partners
anz logo
adelaide logo
auswide-bank-logo
Bankwest Logo
bank australia logo
bank of sydney
bank-of-queensland logo
better choice logo
beyond bank logo
bmm logo
bluebay homeloans logo
bluestone logo
citibank logo
cba logo
emoney logo
equifax logo
Firstmac-Logo-2016-Copy
fms logo
galilee logo
Great Southern Bank Logo
heritage
Honey Insurance Logo
illion logo
ing logo
Heartland Finance logo
get capital logo
latitude logo
latrobe logo
Macquarie_Bank_Logo_MBVert_BLK
me bank logo
mezy mortgage logo
mkm logo
movbe bank logo
Orde financial logo
mystate bank logo
st george
paramount logo
pepper money logo
virgin logo
plenti logo
qudos bank logo
resimac logo
suncorp bank logo
thinktank logo
ubank-logo2
victorian mortgage group logo
westpac logo
wisr
WLTH logo

Speak to the mortgage agency today

Talk to us now
hte mortgage agency footer
  • Home
  • About
  • Calculators
  • Services
  • Locations
  • Blog
  • Podcast
  • Contact
Contact Us

Bella Vista Office

  • 217/14 Lexington Drive, Bella Vista, NSW, 2153
  • 0423 718 612

Parramatta Office

  • 19/103 George St, Parramatta NSW 2150
  • 1800 242 234

Penrith Office

  • 95b Station St, Penrith NSW 2750
  • 1800 146 759

Sydney Office

  • Seabridge House, Suite 120/377 Kent St, Sydney NSW 2000
  • 1800 146 759

Serving The Wider Sydney Area

  • Canterbury-Bankstown
  • Eastern Suburbs
  • Forest District
  • Greater Western Sydney
  • Hills District
  • Inner City
  • Inner West
  • Northern Beaches
  • Northern Sydney
  • St George
  • South-Western Sydney
  • Sutherland Shire
the mortgage agency logo
Tony Xia is A Credit Representative (477089) Of Mortgage Specialists Pty Ltd ACN 050 601 093 (Australian Credit Licence 387025)
Facebook-f Linkedin-in Instagram
Copyright @ 2023
  • Terms and Conditions
  • Privacy policy
  • Website Safe and Secure
  • Made With
  • By Digital Recipe