Property Property Insider
Email us: propertyinsider@echo.net.au
The pros and cons of taking in a boarder There was a time when I was looking at increasing my borrowings against my property and asked my lender if the money I received as board from my daughter, who was living with me at the time, could be taken into account toward my ability to service the debt. Recently I was reminded of this time when I read an article about the pros and cons of taking on a boarder as a way to help pay your mortgage. Basically it came down to this.
Pros for having a border • Additional income • You can offset your household costs • Potential tax deductions for property expenses • The social factor.
The cons of having a boarder • Loss of privacy • Extra responsibilities as a live-in landlord • The income may push you into a higher tax bracket • You may be subject to Capital Gains Tax (CGT) when you sell
Considerations when buying an investment property So you’re thinking of buying an investment property. The financial side of successful poetry investment is a balance between costs, income, deductions and their effect on your cash-flow.
Initial costs
• Many lenders don’t take rent from roommates into account when assessing whether you can afford a home loan. (This was this case in my instance.) Becoming a live-in landlord can help you pay off your mortgage and cover living expenses, while also allowing you to claim tax deductions in some instances. However, there are important implications to consider, which is why it’s so important to consult your accountant or financial planner first. If you’d like to know more about your finance options for purchasing your home, please consult your mortgage broker or lender.
• Deposit • Loan establishment fees • Lenders’ mortgage insurance (if you have less than 20 per cent deposit) • Stamp duty (calculators are available here) • Conveyancing and legal fees • Building and pest inspection reports • Quantity Surveying fees – to create your Depreciation Schedule for the fi xtures in the property, so you can maximise your tax deductions (after purchase).
Ongoing costs • Rates/government taxes • Insurance • Mortgage repayments • Body corporate fees • Utilities not paid by the tenant • Property management fees • Repairs and maintenance costs.
The key to finding the right investment property is research! You want rental yield that works for your current cashflow and capital growth potential to increase future opportunities. You also need to have a clear idea of your investment strategy. What is your objective? To build a portfolio or to use the money made from one or two investments to help you toward something else (for instance paying off your own home)? With a clear strategy and a firm idea of your budget plus allocating the time to undertake proper due diligence you can build wealth for your future.
Ph: 6687 2479 www.bangalowrealestate.com.au
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Mary O’Connor: 0418 462 849 mary@bangalowrealestate.com.au Denzil Lloyd: 0481 864 049 denzil@bangalowrealestate.com.au Genuine Offers Invited
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... is our specialty! The Byron Shire Echo May 23, 2018 21