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What is the best loan structure for your investment property to save you money from tax? Here’s an overview of how you can get the right property portfolio finance for your financial future.

If you have investment properties, you need the right advice that can add thousands of dollars in extra income throughout the lifetime of your properties. The same way, the wrong advice may cost you lots of money as well.

Loan structure for investment property

Sky Accountants have over 40 years of combined experience helping clients get the best home loan for their investment property. Get in touch if you need comprehensive lending and investment strategy advice, we can help you with your property portfolio finance.

Before you buy an investment property, consider the best structure for the long term. You need to consider the tax structure and loan structure. Australian tax law is favourable to property investors so tax structure is very important. Look at negative gearing and capital gains tax.

Where should you hold your investment property? There are four tax structure options. You can hold an investment property in your personal name, in a family trust, a company, and an SMSF.

Property tax

Another question to ask is what the best loan structure for an investment property is. We often recommend borrowing the maximum amount or about 80% value of the property. You want access to the maximum debt because it is tax-deductible.

Which bank account should you choose? Offset or redraw? They may seem the same but when it comes to investment properties, an offset account is the better choice than a redraw.

How do you want to make repayments – principal and interest or interest-only? It might be good to pay down your home loan first before you pay down an investment property loan. For investment properties, interest only may only be better.

How do you secure a loan? If possible, avoid cross-securitising your properties as it can make it difficult to refinance if you want a lower rate or want to sell one of the properties. The decision on one property will affect the other.

Try to use the best loan structure for investment properties. Sky Accountants are not only tax experts, we also have a mortgage broker for our clients. Get the right tax structure and loan product and structure for you.

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As you look for different ways to grow and improve your business, seeking professional advice could prove to be an important and helpful decision.

You can click here to speak to a business, accounting and bookkeeping firm. We also offer hospitality business consultation and mortgage services. We will give you a call to know more about your needs. We will explain to you how we can improve your business.

We would love to help you formulate investment strategies and streamline your processes to take your business to the next level.  Our goal is to help you grow your business, find ways to invest more and increase your productivity.