Hi Tony B and Stargazer,
Thanks for your reply, I do appreciate your point of view, and I need someone to say it as it is and pull me back to the real world, and I think I chose a bad time to want to get into the IP market.

Having said that I do however feel that by just hanging around and putting my money into a savings account is not really taking control of my future. The way I think about it is that if we buy an IP now, even though we are in the poor end of the cycle, are not things bound to change? will not the market pick up again? If we buy something now are we not in a better position to spot a bargain since there is not much competition out there?

Would anybody advise on borrowing more than the cost of the IP so that you have cash flow for those tough times where the place might be vacant or any unforeseen circumstances. That money can remain in an offset account until it is required?

Just a thought,

Love to hear your views          

Thanks again Richard,
Your responses are very helpful, I will keep researching furthur into this in order to see what sort of path we would like to take with our new loan. 

We are currently not with Westpac, but we just went into a westpac to ask about what our options are!

Cheers.

Thanks for you super quick reply Richard,
The reason I do not want to tap into my equity atm is because we are at a great fixed interest rate of 6.95, great compared to todays rates anyway. I do however agree with you that once the fixed term is over then the way to go would be to refinance and put whatever our income is into an offset account.

So for the time being you would recommend not using the money saved (20K) as a down payment on any IP but rather borrow the money instead and place the 20K in the offset account of the IP loan?

We also want to start investing in something small, we were thinking perhaps buying an IP at about 280000 that is in need of renos and do it up in order to increase the value (capital) and rental yield…

Does that sound like a good plan? Im not sure if that is starting small for our situation!

Hi Richard,
Thanks for the response, you have a good point regarding not putting the 20K as a deposit. I am however struggling to determine if the PPOR atm would be +ve or -vely geared if I was to rent it out.
 
Any help???

Cheers,