That what be my major concern – you'd be kicking yourself if that happened.

If you feel that the property is not performing and the money could be utilised better elsewhere (either a PPOR or an IP) then I'd be tempted to sell it. Where is the property located?

Could you possibly add value to the property? You might be suprised with what a few costmetic renos can acheive.

Because it's an IP, you'll be up for CGT when selling as well as the general costs associated with selling a property.

Cheers

Jamie

Hi there

There's been a few posts on this subject recently – here's one to get you started https://www.propertyinvesting.com/forums/community/opinionated/4330540

Hi newinvestor

Welcome to the forum.

A large $600k PPOR debt will effect your borrowing capacity in the future (as will the $24k car loan).

Instead of buying something "new" – have you thought about purchasing something that you could add value to? You might find something that could do with a few cosmetic reno's that will add some equity. IMO, this would be a safer option then investing o/s in the states or Brazil in the hope of capitalising on some fast growth.

Cheers

Jamie

If you haven't already set your home loan (PPOR) up as interest only I'd strongly advise you do so. If you anticipate that this property will become an IP in the future, there's no point in paying down the principle. Instead set-up an offset account attached to an interest only loan and deposit your excess funds in there. When it becomes an IP in the future, you can withdraw the funds and place them in an offset account linked to your new PPOR (this essentially increases your deductable debt). 

Depending on your current lender, you could access up to 90% of the value in your PPOR. This will give you around $100k for a deposit and purchasing costs on your next property (however, this is likely to incur some mortgage insurance fees – which won't be tax deductable because the purpose of the funds is to purchase a new PPOR). If you'd prefer to avoid mortgage insurance, you could access up to 80% of the properties value which would give you approximately $60k for your next purchase.

Cheers

Jamie

Hi g0biin

This is been covered heaps in the last few weeks – do a quick search on "offset" and you'll find loads of info.

Jamie

Agreed. It doesn't matter what strategy you adopt, as long as you have done your research and are clued up, this will help mitigate risks. 

That's great news! Sounds like you're dealing with a decent REA.

Well said.

Or just set it-up as a second IO split on the variable product. If it's set-up as a second facility you'll be able to easliy identify the deductable debt from the non-deductable.