Hi i'm new to this forum.
I own 1 investment property and recently moved out of my home and am
renting it out aswell. I'm currently renting.Rent from the IP is negatively geared.
The rent from my home is positively geared.
Overall rent is far greater than interest and repayments.My rent is used to pay my home loan off as quick as possible.
I do not have an offset account.I am looking to further invest within the next 6-12 months.
I also would like to purchase a home rather than rent in the next 2-3 years.Is there any tips or structure which I could benefit from?
Would an offset account help?
I believe I can withdraw money from my home loan account anyway.Thanks in advance. I'm very passionate about getting into property investing
and looking forward to joining this community!I would set up an offset account against one of the IPs and deposit any excess cash into it. When the time comes, you can withdraw this money to use towards a deposit on your next purchase.
Alternatively, if you have the equity, you could look into having one of your investment properties refinanced. You could then use the refinanced portion as a deposit towards your next purchase (no need to use your own cash, use the banks).
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
thanks for the reply.
What are the benefits of using an offset account rather than putting it straight in my homeloan.
This is considering i can withdraw from my homeloan account?When you redraw from the home loan the interest will not be Tax deductible unless the original purpose of the loan was for investment.
Richard Taylor | Australia's leading private lender
You have two factors to consider, purchasing another IP which you should use debt to do and the second is wanting to purchase another PPOR for which you should use as much of your own money as possible and minimise the borrowings for this.
To do that, set up an Offset for which surplus funds will be banked. This future balance will be the deposit for your PPOR. It also has the immediate effect of reducing the interest charged on that associated loan.
I would go further and suggest that if your existing loans are P&I, swap to IO if you can, 5 years only. In this way, it should free up principal that should go into your offset also.To fund the deposit for another IP, revalue and refinance one of your existing IP's, with a minimum of $120k LOC if you can and use part of that LOC to finance the deposit for the next IP. In this way, you are using 105% (depending on which state you are in) debt finance.
Good luck
GregThanks so much for your input.
Sorry to sound like a newbie but what is LOC?LOC = Line of Credit
Richard Taylor | Australia's leading private lender
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