Nearly 3 weeks now and nothing arrived telling me how to make my next fortune.

I think i have been placed on the barred list as i had too many questions to ask. 

You only get the free info pack if you agree to sign up, pay your membership fee and then buy 3 properties.

SG

No you can deposit your rent and salary into any account you like.

Just make sure that the funds offset the interest you are being charged on the IP loan.

Always best to keep the 2 account separate to avoid any ATO issues.

With regards to drip feeding i merely meant that you want to have the interest charged on the 2 IP loan account coming out of the offset account once a month.

Hi SG

Ok all looks ok.

On the basis that the LOC non dedcutible debt is not drawn at all get your lender to link a 100% offset account to the IO loan and have all of the rents and your salary going into this account.

Drip feed the monthly interest repayments on the 2 IP loans from here.

As mentioned earlier ensure you get your place valued even a real estate can do you a market valuation on letterheading.

With your next IP make sure the loans are not cross collateralised just to keep things nice and clean.

If you do decide to buy another PPOR and want to retain the current PPOR look at selling property into Trust with you as the Trustee. This will shift the burden of debt from non deductible to non deductible.

Tess

Dont get me wrong I am not recommending in any small way that you take a LOC FOR your PPOR loan in fact the only given what you have told us is to take an interest only loan with 100% offset.

Bank West Rate Tracker product DOES NOT have one attached.

Also they are certainly  not one of 2 institution to offer such a product so think maybe he was having you on.
The service levels relate more to documentation and settlement rather than approval.

With most lenders you can obtain an immediate approval or decliniture by way of electonic lodgment and this takes merely a matter of seconds. Such decision is then usually subject to provision of the required documentation. The problem lies when you come to settle and Bank West tell you they are not ready. Your Vendor does not want to hear such a strory and certainly has the right and in most cases will charge default interest. Bank West unfortunately will not cover this for you.

To give you an example i did a commercial deal with Bank West at the end of last year where the loan was 100% approved and the Credit Manager rang the client to confirm this. 3 Attempts at documentation later settlement day was upon with no actual documents to sign. The client was fuming and Bank West ended up settling albeit a day or two late without any documents having been signed. Client was charged default interest and the Bank ran the risk of not being able to register its mortgage had their been a title problem.

You need a loan and a lender that has what you want not only from Day 1 but can evolve with you during your changes of circumstances.

Dont forget it is not always necessary to put all of your funds into a deposit and pay the loan off as quickly as possible as your path for the future may change and the ideal home for today may become a IP of tomorrow.  This is where a LOC can be useful in your loan planning.

Hi Star G

What you are wanting to do is fairly common however a bit of care needs to be taken in order to ensure achieve the maximum return out of this decision.

They are a few variable and your mortgage broker should be able to assist with these if he is experienced in investment structures.

Difficult without additional information to make an open recommendation.

Hi Kane

Ok i havent checked the SA stamp duty scale but have you considered selling the IP into a Unit Trust structure, borrowing 100% of the market valuation and using the net suplus funds (difference between the IP valuation and the current balance) to pay down your PPOR loan.

If you can get a higher valuation than $140K from a local real estate agent and can justify the figure then you should be able to raise around $100K. This would bring your PPOR loan down to around $120K and the whole $145K on the IP would be Tax deductible.

Couple of considerations being the stamp duty on the Transfer for SA and any potential capital gain made on the sale of the IP to Trust. On the basis these figures are acceptable then you are shifting the debt burden from non deductible to deductible interest.

This is a common method used by clients to achive what you are seeking.

Hi WhiteKnight

Firstly welcome to the forum and I whope you enjoy your time with us.

I have had a few clients do exactly what you have indicated in the Waterford area although the blocks have been big enough to enable a 2nd dwelling to be constructed on the land.

If you are looking at small acreage and the zoning allows for dual occupancy then i can't see too much of an issue.

I would be ringing another Private Town Planner and ask them what sort of property would be eligible.

Certainly there is no drama in renting out the front house and living in the back block once this has been constructed.
Might find financing it an issue depending on numerous variants as a lot of lenders do not like more than one dwelling on a residential A block.
 
Your mortgage broker should however be able to get around this one but any problems shoot me an email and I can point you in the right direction.

Hi Kane

I am assuming that moving into the IP is not an option.

The course of action will depend on various factors: the State in which the properties are located, original purchase price and date of purchase, your marginal tax rate, how the loans are currently structured etc etc

Would need some actual figures to make a recommendation.

The interest is not tax deductible so unless you are getting more than 7.62% net of tax I would look to pay the loan back.

Nothing to stop you using the security to gear again for a new IP and claiming the interest as a deduction.

Will probably still be positively geared but use the income to reinvest and go again.

Sorry Damian

New trusts do not have appointors they have principals – the principal can also be trustee and beneficiary

Not according to Maddocks Lawyers in Melbourne. From their Trust website

"Each new trust will have an Appointor whose role is to replace the Trustee if needs be. Although you have a choice as to whether an appointor will be appointed to a new Trust, you should consider the benefit of having an appointor to cater for situations such as the death or insolvency of a trustee. The appointor may be the settlor, an existing trustee, a named beneficiary or any other third party".