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Contrary to what most people say I think LOC just cost extra for little benefit.
Consider a standard variable loan with 5 years interest only period. Lets say you borrow $100,000. Most loans will allow you to make extra repayments and allow redraw free of charge, or others have offset accounts (same net effect). Having got the $100,000 make a lump sum payment of $99,900. DO NOT repay the whole $100,000 or the loan closes. As you need the cash just redraw.
Using this method you may actually save money on the interest vs a LOC. There is another catch you must renegotiate the loan every 5 years. This is not so bad considering LOC’s get reviewed between 1 and 5 years anyway.
Regards
David
[email protected]Hi
I don’t know much about Cobar but just a thought. Maintenance costs on rental can make the deal unattractive. For example if something breaks you are at the mercy of local tradesman and in small towns like Cobar of ~5000 people. What do you do when the place needs painting etc etc or a tenant leaves and the place needs cleaning up.
If you can drive to the property you can fix it yourself.
I came across Beaconsfield in TAS. Pop 3500. Low prices high rents BUT like I say its a long way from Sydney if something happens and it needs some work.
I’d be interested to hear others experiences who own and rent a long way from where they live.
Regards
David
