If you're thinking about buying your second investment property, it's a good idea to understand how to leverage equity in your existing home to purchase another property (or two).
A depreciation schedule is a great tool for property investors as it is considered a “non-cash deduction”. Unlike other property expenses that you need to pay out of your own pocket first, a depreciation schedule is paid for once, but it can be reused year after year to claim back legitimate tax deductions.
If you're looking to purchase an investment property, many lenders will try to refinance your home loan and offer discounted rates and incentives to get you on-board.
The first question that most people ask when they want to take out a mortgage is “Which bank offers the lowest interest rate on the market?”. Others spend countless hours ringing different lenders to compare what interest rates are on offer. However, if all you’re doing is comparing interest rates, you’re only getting half of the story. You need to know what the borrowing costs will be to get the complete picture.
The announcement by the Reserve Bank yesterday to cut interest rates by another 25 basis points has fuelled hopes that this will strengthen the economy by consumers engaging in further spending and lending. The official cash rate now stands at an historic low of 1.75 per cent.
One of the most difficult thing to do is to save up enough money for a deposit for your first home or on an investment property. The experts recommend that you have at least 20 per cent, plus an additional 5 per cent to cover purchase related expenses. But how realistic is it to save up a deposit, given Sydney's recent property boom and souring property prices?