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  • Profile photo of pudinkpudink
    Participant
    @pudink
    Join Date: 2006
    Post Count: 6
    April 14, 2011 - 1:28 pm

    Thanks a lot guys for your views and recommendations.
    At the moment, I will just park it in offset account reducing interest while doing some research and discussing with accountant and planner. Hopefully I can have all possible options for better decision.

    If say I don’t have to pay interest on PPR mortgage and I have some extra funds, will it be better if I park the extra money on IP offset account?

    My situation:
    PPR value: $490k.
    IP value: $400k. Loan $350k (7% IO – 100% offset). Rent $320pw. I have to pay roughly $750pcm out of pocket excluding rates etc. Say I have $50k sitting on offset account. It would bring out of pocket money down to around $500. Will this more tax effective?
    Take home pay around $5400pcm + $2800pcm (from my wife).
    No other loan. No kids (yet) – planning to have first baby next year.
    Planning to buy another IP of around $300k perhaps towards end the year. If this is good to go ahead, what would be the best structure?

    Thanks heaps again. Glad that I know this forum.

    Cheers

    Profile photo of pudinkpudink
    Participant
    @pudink
    Join Date: 2006
    Post Count: 6
    April 13, 2011 - 6:45 am

    Hi Scott,

    Thanks for advising option. I have no idea in doing smsf and how to use this vehicle in investing. It sounds great tax benefit from what you mentioned. I haven't done research on smsf. Any suggestion?

    Cheers

    Profile photo of pudinkpudink
    Participant
    @pudink
    Join Date: 2006
    Post Count: 6
    April 13, 2011 - 4:50 am

    Thanks Richard and Ryan for your inputs. Really appreciate the advices.

    I really want to give something back to my parents in return. Perhaps reserving the interest money I am now paying to bank in a term deposit or something cash. Then I can start supporting (sending some money back) them during their full retirement time.

    I'm also very keen in doing property investment. At the moment, I have 1 IP negatively geared (around $500 extra a month).
    I would need some advice from you as well on how best I should structure the mortgage. Negatively geared property seems to create a limit.

    Thanks again.

    Profile photo of pudinkpudink
    Participant
    @pudink
    Join Date: 2006
    Post Count: 6
    January 10, 2011 - 9:58 pm

    Hi Priz,

    I also live in Tarneit and am in the similar situation as you. I bought the property in Dec 2008 for $300k and got bank valuation in June 2010 for $420k. About 40% in 1.5 years, not bad at all . I thought properties in Tarneit would not perform this well. And yes, JacM is right about regional rail link project which will have tarneit station just north to leakes rd near derrimut rd intersection. Also, new williams landing station (shifting aircraft station as far as I know, not additional station) and williams landing development itself. Other future project to mention is the Westlink tunnel which will give alternative access from west to city.

    These were some of the reasons I decided to switch it into IP. Exactly like Jamie said, we refinanced, switched to interest only with 100% offset and used the 'excess' money to fund deposit and buying costs of another property (due to settle early next month). However, the 'excess' money won't be tax deductible since it is used towards new PPoR. Correct me if I'm wrong or any suggestion on how we should structure the loan efficiently. Priz, I hope you don't mind if I'm asking questions here since I believe that the suggestions/info provided by the experts here will help.
    All the best.

    Cheers,
    Ryan

    Profile photo of pudinkpudink
    Participant
    @pudink
    Join Date: 2006
    Post Count: 6
    December 21, 2010 - 11:26 am

    Hi Mike,
    I appreciate the reports you sent. They are very useful and informative.
    Thanks a lot for your generousity.
    Cheers,
    Ryan

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