Poll: Second property, separate bond or equity from primary property.

[Other Pineapple Smurf]

Interested in how those with bonded second properties finance it.

Did you take out a separate bond for the property, or did you "switch" your current bond to use the equity on the primary property.

Waiting for my OTP to be accepted for a second property (let's not debate that here) and looking at bonding the property with different lenses now that I do own property.

I know of the kite flying systems like "The Treoc Way" as so many people in my town got burnt doing that. So no, not for me

 

[zerocool2009]

Just get a second bond ! Another issue, dont close your existing bond as in if its paid up !

Dont mix property and bond's (sars dont like it either), as you cant prove what you written off via expenses

 

[muisnes]

Always Separate bond

Main reason is SARS.

You will pay tax on income from a second property. You can deduct interest paid on the bond of said property to reduce the income (which reduces the amount of taxes due). No deduction allowed for payments made towards your primary property’s bond.

Rather use the bond on a second (or 3rd/4th/whatever) property to finance your primary property if possible.

Of course above only applies if you can do it without overextending yourself.

 

[Mike Hoxbig]

Second bond. Claim back interest, agent fees, levies etc. Dump any excess back into the bond and reduce the term.

The sooner you pay it off, the sooner you can start generating real income which you can then dump into a third property and snowball from there...