Guys if i had IP on a interest only and offset account and say had accumulated 100,00 in my offset account than wanted to use some of that money to purchase an PPOR whats the best way to do so say use 50,000 to purchase the IP and maybe use 50,000 to pay down principle on the current IP?? I wanted to ask how do you pay off the IP if it is just on a interest only loan ? Even if you rented it out the tenants would just be paying off your interest on the property but never the principle amount??
Is it always best to register as Ip even if you intend to use it as PPOR??
Hi there
Just so I've got this right – you currently have one IP with $100k sitting in the offset and you're looking to purchase a PPOR?
If so, then just use the money from the offset to cover the deposit/costs on your PPOR and set up a loan for the remaining amount – that will bolster the deducible IP interest back up.
If you need to borrow against the IP to fund some of the purchase, just make sure the borrowed funds are set up as a seperate loan and don't use your IP to secure your PPOR!
Work out how much money you need to hold onto as a safety net too – you may not want to use that entire $100k.
Cheers
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]
Oh thank you for your great advice Jamie it was very informative. Jamie can you explain to me tax deductible and non deductible and how it relates to the property investing I always see people on this forum mentioning it and it is very confusing.
Thanks Jamie
No probs
Deductibility is determined by purpose. If the purpose of a loan is to secure an investment then it's deductible. If it was to secure a non investment like an owner occupied home (PPOR) it won't be deductible.
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]
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