Hi,
Im new to this whole property investing. I hve around 200k equity in my ppor. Have been searching on the best ways to be able to purchase IP’s and ive heard aot about using loc’s to help me purchase my first investment. Can someone explain to me better of how one of these works, and is it wise to get my rental income and tax benifits put straight back into my loc. This will be on an intrest only loan for my first ip. How much tax benifits would you expect back, and how much out of pocket expenses would i expect weekly if i was to pay the interest weekly out of the loc. Im looking at an investment property at around the 400k mark. If i get a 50k loc, is it wise to pay all fees out of this including the stamp duty and all other purchasing costs.
New to this so im trying to get an idea of the best way to structure my property’s to get the maximum benifits, and to do it right the first time. Is there a better stratergy.
Im trying to find a good broker, but its hard to find one that actually can get me all the benifits entitled. Unless they are actively doing it themselves.
TJMC
Firstly welcome to the forum and I hope you enjoy your time with us.
Normal structure we recommend to clients is along the lines as follows:
1) Look to take out either a Line of Credit or Investment loan sitting in behind the initial loan for the principal place of residence and then use these funds to draw down to cover the deposit and acqusition costs on future IP's.
2) Take out a standalone investment loan to 80% or 90% of the new purchase price on each new IP using the LOC or investment loan to funds the balance.
As the IP increases in value look to debt recycle by increasing the standalone loan secured against the IP and using the raised funds to pay down the investment loan or LOC secured against the PPOR.
Link an offset account to the initial PPOR loan and have all sources of income going directly into this to maximise the interest saving on the non decuctible debt.
You can always look at a secondary LOC to pay your investment property costs such as Rates, Land Tax etc and allow the interest on this to capitalise.
Totally agree you need to use a Broker who has purchased one or two properties and who can walk the walk as how can he / she structure such a facility and provide recommendation to clients when he cant even create property wealth for himself.
Richard Taylor | Australia's leading private lender
Thank You Kindly Richard.
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