You might be thinking about your next property and wondering about converting your current home into an investment property and place it onto the rental market.
Typically, home owners sell their principal place of residence when they move, transferring the equity they’ve built in one house and applying it to the next. But this isn't always the case, as turning your primary residence into a rental property is a strategy used by many home owners to build wealth through property.
The key benefit is that any costs, such as maintenance and interest payments are tax-deductible. But the benefit isn't always allowable so it is important that you undertake what the ATO call a Purpose Test to determine if the new investment status is allowable. At this point it is important to seek independent professional advice so you are clear on the rules and benefits.
Whatever you decide, it is important to focus on the economic factors rather than the emotional ones. Check out the 6 questions you should ask yourself before you proceed along this path:
What are the benefits of turning your existing property into an investment?
Before you decide on next steps and the loan structure, be sure to give one of our team a call to discuss your options on tel. 1800 265 546 or book a time for a Mortgage Broker to give you a call back. Investment loans have different interest rates and conditions from owner-occupied variable products and so it will be important to get sound advice about options for refinancing an existing loan vs taking out a new investment loan.