We are about to go into our 2nd new home which will have a 210k mortgage& is valued @ 320k we also have a investment unit which is financed on an io loan & returns 15% on our money which is fixed for 3yrs @ 5.9%.
wondering where to go from here & what our next step should be as we are not sure.
Goal is to invest/buy & sell to reduce our own mortgage as quick as posible & own our own home to free up that weekly mortgage that resticts your ability & freedom to push further ahead.
Any suggestions on a startegy that may have worked for you & may help us out would be appreciated as i am sure we all had this situation at some stage when we started out.
Thanks
Boardy
P.S what percentage of your income would be a comfortable amont to borrow without going in to heavy when investing as we dont want to go the opposite way & lose it all.
Hi Boardy
Sounds like you’re on the right track with doing a few buy/sells for cash to reduce your PPOR debt, try adding to that sound mortgage reduction principles (A few books out there on the subject).
You don’t necessarily have to change too much about your spending habits, just the order of flow into and out of your mortgage account.
As for investing further, all depends on what particular strategies you’re interested in and how fast you want to get there?
A very important tool to have is a flexible mortgage on your PPOR with no fees, IO for long terms, full redraw facility to access equity, or a LOC. A loan with all these features will help you access equity and invest quicker and prevent costly refinances every time you want to buy a new IP. Try to avoid cross-collateralisation too.
Also get a good understanding of how valuations work and how you can get a maximised val for yourself.
I know it sounds basic but these basic stepping stones are the key to duplication of IP’s.
Good Luck!
Brendon
You must be logged in to reply to this topic. If you don't have an account, you can register here.
