WWRD How To Get Your Investment Money Back

Published: April 29, 2016, 2 p.m.

b'ARVE Error: Mode: lazyload not available (ARVE Pro not active?), switching to normal mode\\n\\n\\n\\n\\n\\n\\n\\n\\n{"@context":"http:\\\\/\\\\/schema.org\\\\/","@id":"https:\\\\/\\\\/onproperty.com.au\\\\/wwrd-get-investment-money-back\\\\/#arve-youtube-wdtdzgxv1w8659a0b2e502f4061072862","type":"VideoObject","embedURL":"https:\\\\/\\\\/www.youtube-nocookie.com\\\\/embed\\\\/wdtdZgXv1W8?feature=oembed&iv_load_policy=3&modestbranding=1&rel=0&autohide=1&playsinline=0&autoplay=0"}\\n\\n\\n\\nWhat would Ryan do? How would he get his deposit money back whilst maximising tax deductions?\\n\\nHey guys and welcome to another episode of WWRD or What Would Ryan Do, the segment of On Property where you send in your questions and I give you my opinion about what I would do if it was me in your situation; and I try and leave you with some thoughts that you can think about yourself.\\n\\nWe are not taking ourselves too seriously here, but we are trying to help you guys to assess your situation and get some outside thought on it because sometimes you are so deep in the jungle, you cannot see the forest for the trees because you are just looking at your own situation. It can really help to get an outsider\'s perspective. We also like to have a little fun here, as you can see by the photo; if you have any questions that you want answered, you can submit them. Just email me, Ryan@OnProperty.com.au.\\n\\nSo the question today comes from Vicki who asked, "How do you structure a loan when you want to buy an investment property to maximize tax deductions when you do eventually buy your own first place?"\\n\\nThe thought process here is Vicki is going out, she is investing in property while she is renting - so she is rentvesting, as some people like to call it. And basically, she wants to use her money wisely so when she does buy her own place, she gets the maximum tax deductions on her property portfolio. So she is using an example: if I buy an investment property for - let us say $100,000, I would need $10,000 deposit and $5,000 closing cost. How do I get that $15,000 back with tax deductions?\\n\\nThe ATO will not let me refinance and take $15,000 out and claim the interest on the $15,000 as a deduction. I have to have an initial loan balance of $105,000 and they have not reduced the balance of the loan at all. How can I do this?\\n\\nWell, let me first say, this is WWRD. This is What Would Ryan do; this is not what a mortgage broker do or what would an accountant do because I am neither of those things, so this is my disclaimer that I cannot give taxation advice or mortgage advice. However, I will talk about this a bit and some things. If it was me in the situation, what are some things that I would consider and what would I do?\\n\\nAnd so we have a $100,000 property, we are putting in $15,000 of our own money. We are talking small figure, which is probably unrealistic for most people, so let us bump it up a bit to make it more understandable for people. Let us say I am investing in a house, an investment property for $400,000, and I am putting down a 10% deposit of $40,000 plus let us call it a $10,000 closing cost. So I am putting in $50,000 into this $400,000 property. How can I get that $50,000 back and get tax deductions for it as well?\\n\\nNow, this is a big ass because you are actually saying, "How do I get my own money back from my investments and how do I also get tax deductions for my money?" It is kind of the equivalent of saying, "Okay, I have $50,000 in the bank. How can I get tax deductions and tax benefits for having $50,000 in cash and for earning money on that $50,000?" It is just not really the way that tax system works. The tax system is there to like, if you are making a loss, if you have legitimate expenses against your property, you can claim them against the income.\\n\\nIt is not there to create these tax deductions from money that you have yourself. So, even though we are not saying, "How do I take my money and get a tax deduction on it," that is effectively what we are trying to say becaus...'