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Some great questions and suggestions Benny & Corey – thanks.
In regards to what’s been discussed and some of the questions raised, I’m thinking of the following solution: I believe the value of the property would drop by at least 20%. If I were to bolster current equity by using some savings in an offset account to bring the equity and offset to the same value (20%), then refinance at 4% (or below) with P&I as Richard & Corey suggest, I could make the property cashflow positive. I figure if the property goes down in value with the above scenario, I would be able to keep it long term to see the value rise again in some time in the future whilst building equity at the same time through principal payments.Thanks Tony and Richard. I’m looking for a broker with plenty of years of good experience and think your advice Tony re engaging someone who is both investor & broker is a wise idea – thank you! I’m in a bit of a sticky situation – I bought the property 3 years ago under negative gearing…. realising this was a mistake about 6mths later. It hadn’t appreciated as originally anticipated and I actually think the market will go down a lot soon which will make matters worse. If I sell I will obviously not realise much equity and will not make up for the acquisition costs. If I keep it and refinance either Interest only or P&I (as you were suggesting Richard), even an interest rate of 3.5% it would still be negatively geared. I’m open to any other ideas you may both have
Cheers
