I currently own a 2-bedroom apartment with a nil mortgage and have about 120K invested in shares. I also have 40K in cash which includes the voluntary redundant payment from my previous employer. I am currently unemployed.
I have been considering of investing in properties. I don't really want to touch my cash and shares portfolio. Is it possible for me to use my existing apartment as collateral to borrow money to invest in this new property 100%? My plan is to rent out my 2-bedroom apartment and use the rental payment from two properties to pay off my second mortgage.
What do you think of my plan? Do you think this is feasible?
As long as you can support the repayments from your current income irrespective of how this is made up I cannot see an issue with the plan.
Just to need to bear in mind that there will be ocassions when the property is vacant or need money spent on it and you need to be able to cover these shortfalls.
Richard Taylor | Australia's leading private lender
Dont forget to structure your loans correctly to separate personal debt from investment debt for taxation purposes.
You could also set up a 100% offset account which would reduce the interest on your loan repayments …. always best to reduce your personal debt first.
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