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Oh yes, thanks for reminding me about that! At this stage we think the best strategy for us would be cashflow. Possibly looking to add value through simple renovations to create CF positive.
Anything else I've forgotten?
Thanks Kate – yes, that is another point to consider, and one of the reasons we're planning the reno (oh, and because the existing kitchen is woeful!).
We're very much heading towards the idea of accumulating a number of smaller properties that are CF+ or nearly so, rather than being negatively geared on something larger. Instinctively I feel that strategy gives us more freedom in the future, whether we decide to buy a new PPOR in the metro area, or in a regional area, or even if we want to move overseas for a while. And it helps to diversify more easily, in terms of location.
Is there a downside to this that I haven't thought of yet?
Thanks Derek – very good advice. We do already have an offset account, and I take your point about the additional loan payments potentially hurting us in the future tax-wise if we do end up renting out our existing place. Looks like the best thing to do now is put all our spare cash in the offset, which has the same effect of minimising interest for now but keeps our options open in terms of the future.
