WHERE I WOULD IN­VEST $10k

Money Magazine Australia - - COVER STORY -

De­pend­ing on the con­di­tion of the prop­erty I buy in my rentvesting strat­egy, there are two op­tions I’d con­sider.

First, if the prop­erty was in a sound con­di­tion, whereby it may not look brand new but rather is clean and tidy for any ten­ant to en­joy, then the $10,000 would go straight into the off­set ac­count to re­duce the in­ter­est I was pay­ing on the loan. The ben­e­fit of this strat­egy is that the in­ter­est sav­ing is tech­ni­cally tax free, as you are not gen­er­at­ing in­come, which would be tax­able with other types of investing. In the case of an off­set ac­count you are sav­ing in­ter­est, and you don’t get taxed on sav­ing on an ex­pense such as in­ter­est.

If, how­ever, the prop­erty was in need of a tidy-up, you can get the big­gest bang for your buck by paint­ing it. This is by far the best way to trans­form any prop­erty. If it’s a free­stand­ing prop­erty $10,000 would more than likely get both the full in­te­rior and ex­te­rior painted, giv­ing rise to im­proved in­come in the form of higher rent and po­ten­tially an up­lift in the val­u­a­tion.

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