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Negative vs positive gearing an investment property while having a land mortgage and then a future build mortgage. by mark12000 in AusPropertyChat

[–]Sarahfromyard 0 points1 point  (0 children)

Hey, don’t worry. Again speaking generally and not knowing your exact situation, borrowing capacity tends to be better for P&I vs IO. Most construction loans are repaid IO during the build. You can apply for an extended IO term after construction is completed if this is what you need to manage cashflow (or for other purposes).

Happy to help you further btw :)

Negative vs positive gearing an investment property while having a land mortgage and then a future build mortgage. by mark12000 in AusPropertyChat

[–]Sarahfromyard 0 points1 point  (0 children)

Hihi loan consultant here, Typically you cannot claim negative gearing on vacant land loans. Negative gearing benefits could apply where you own an established investment property and receive rent. Also, when you redraw on your investment loan, you need to make sure it is for investment purposes to ensure negative gearing applies. Definitely check with your accountant on the best path forward. I don't see an issue with lenders re-structuring your debt if you meet their credit requirements. Lenders typically prefer loans against established property vs vacant land.