Property investment - Paid off my main house mortgage, what to do now?

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Forums › Finance and wealth management › Property investment - Paid off my main house mortgage, what to do now?

samgdan

160 posts

Master Geek

#315970 3-Sep-2024 19:34

Hi All,

i have managed to paid off my main house mortgage. 🥳

I have three rentals and they have at least 50% mortgage on each on them.

for the rentals I always pay the bare minimum, all the efforts went to my main house.

now that the main house mortgage has been paid i dont know what to do with the spare money.

should I start paying off the rentals or invest in something else and keep paying the minimum on the rentals?

cheers.

heavenlywild

5060 posts

Uber Geek

Trusted

#3278628 3-Sep-2024 19:45

Well pay off your next set of mortgages considering how high interest rates are still.

Unless you can earn something north of 7 or 8% elsewhere.

samgdan

160 posts

Master Geek

#3278640 3-Sep-2024 20:07

that was one of the main ideas, but what about the interest deductibility that can be claimed at the end of the financial year? if we consider that, is it worth it to pay the mortgages on the rentals?

heavenlywild:

Well pay off your next set of mortgages considering how high interest rates are still.

Unless you can earn something north of 7 or 8% elsewhere.

davidcole

6034 posts

Uber Geek

Trusted

#3278650 3-Sep-2024 20:31

Surely it’s better to get an income (and pay tax on it) to continually make a loss?

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tweake

2391 posts

Uber Geek

#3278666 3-Sep-2024 21:57

davidcole: Surely it’s better to get an income (and pay tax on it) to continually make a loss?

many don't. not 100% sure on the logic behind it, or if its simply "don't want to pay tax".

if done right you can also transfer your tax from your day job onto it as well. that way your tax goes into the business, which you run at a loss so you don't pay tax, then you sell and claim capital gain and don't pay tax on that. its also often done with "10 acre farms".

Handle9

11389 posts

Uber Geek

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Lifetime subscriber

#3278670 3-Sep-2024 22:40

tweake:

if done right you can also transfer your tax from your day job onto it as well. that way your tax goes into the business, which you run at a loss so you don't pay tax, then you sell and claim capital gain and don't pay tax on that. its also often done with "10 acre farms".

Citation required. Rental property tax losses have been ringfenced for quite some time.

nztim

3815 posts

Uber Geek

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TEAMnetwork

Subscriber

#3278671 3-Sep-2024 23:10

Mortgage interest is tax deductible, while this current government is in power, leverage to buy another rental property

This can all come crashing down with a change of government though!

Any views expressed on these forums are my own and don't necessarily reflect those of my employer.

Handle9

11389 posts

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Lifetime subscriber

#3278673 3-Sep-2024 23:14

@samgdan, firstly congratulations on paying off your mortgage. It's a massive achievement.

There's not nearly enough information to give you any meaningful suggestions. You are probably best to find a "for fee" (as opposed to a "free"/commission) Financial Advisor who can map out what your goals are, your risk appetite, age, health and income security.

The only comment I would make is that having a main house and three rentals you are likely overexposed to the property market. Seeking diversification would be something I'd be strongly considering.