Hi QLDs007 and Benny, thanks very much for your reply, your answers to my questions have made me come up with even more questions

Before I move on, let me make the following assumptions for the example:-

– I owe the bank $300k for each IP

– The interest rates of the 2 mortgages are the same

– I am able to put away $2,000 saving per month from my salary

– A family of 4 needs $5,000 per month to live comfortably

– The bank agrees to extend my interest only mortgage and I do not need to make payment to the principle

Using the same example from my original post, I own 2 IPs and pay $1,400 interest only repayment per month and say I was able to add value to both IPs thus allowing me charge my tenants $1,800 per month for both properties. These recurring rental incomes will then go into the offset account for each property. Now I will be able to start paying less interest monthly because I have an additional $400 in each offset account plus my personal saving of $1,000 in each offset account.

Here comes my question/comment:-

1) To fully realize the $1,800 rental income, I need to have $300k in my offset account. I understand the flexibility feature of an offset account which I will be able to withdraw money to do things I like, but at the same time, once I draw money out, then I will have less rental income.

2) To achieve $5,000 per month income to support a family as stated above in the assumption, I really need at least 3 IPs each with $300k in the offset account. Unless I win a lottery, to obtain that $900k, I really need to start off with much more IPs and then profit from the equity growth by selling them.

3) I read the My four-year-old the property investor, it mentioned the equity growth from an IP can be used to fund the deposit of another IP. Can I ask the bank to turn the value of the equity growth into my offset account?

4) Continue from (3), if I did use the equity growth to fund the deposit of another IP, wouldn't it create another loop where I have to find yet another $300k to allow me to realize the rental income?

Thanks everyone and I wish you have a good long weekend.

Kingsley