澳洲Australia property Robbing Peter to pay Paul? - borrowing to

在澳大利亚


I have one IP -ve geared.
Has anyone deliberately borrowed say for air conditioning - so they can positively gear an IP.
Say an aircon cost $3,500 - I pay around $5 extra a week in interest (7.30%), I get approximately $6.80 per week in depreciation (10% diminishing) and a rent increase of say $5 / $10. I pay any positive cash flow back into the loan thus reducing the $3500, the loan amount also decreases in real terms by the rate of inflation. Does any one see any flaws in this thinking.
.
Regards

Keen
:confused:  

评论
Sounds good to me
The interest is also tax deductible and you have just increased the appeal of your property. Especially if it becomes vacant in summer.

Darryl  

评论
The key to this is the "rent increase".

With depreciation you will only get back at best 1/2 of your capital. You are more likely to get $3.36 a week as a tak refund @ 10% diminishing.
So at the end of ten years you still are out 1/2 the cost , but for the rental increase. Sooner if you claim it faster.

It is a good cash flow tool though if you have major maintenance costs allowing you to pay for them slowly.

MJK  

评论
Hi Keen,

We have done a simliar thing to two properties we have under contract. Long term tenants in one without an air-con and while I was inspecting the house I got the agent to ask whether they would take a $5 a week raise in rent if I bought a air-con for them. They jumped at it.

Now they are even coming in to the agency asking how soon the sale will go through because they want the air-con! (Will only be installed after setttlement)

And we get the benefits of depreciation as well.

An air-con will also add value to the property escpecially in hot/humid areas and if the tenants do change will hopefully reduce vacancy because it is an attraction over other properties.

:)

Timmsi  

评论
Hi Keen,
How have you worked out the depreciation?
Robyne  
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