I know I have been a little sceptical of the merits of investing in property at the current time, but none-the-less I am still doing the math to see if it is worth my while.
I hope to be buying a new house in the next couple of months to be my primary place of residence. My problem is what to do with my current house. The interest in the house has not been overwhelming and I am considering keeping the house on as an investment property rather than sell for what I believe to be below a fair price (I've already reduced my expections 15% from this time last year).
The current low interest rates makes this much more viable an option than before.
The rental property publication on the ATO website says that in this situation that some of the interest on the loan may be deductible. Then they fail to provide any clear guidelines on how to determine how much.
At out current outstanding loan payment the rent will more than pay for the interest on the loan. Ideally we would like to get a closer match between rent and interest and even possibly being negatively geared. But somehow I get the impression that this is frowned upon by the ATO.
Have any you been in a similar situtation? Any ideas about how I might legally maximise the loan on the rental property by taking advantage of the equity we have gained? Thanks in advance.
