I realise that there is probably no one right or wrong answer with this topic, but am curious as to what others would do.
With a ppor and 2 ip’s I have surplus cash which i want to use to bring down the principal owing on the ppor, thereby increasing equity to buy more ip’s.
Is it better to use surplus cash to do this (pay down the loan of the ppor) or use cash to make capital improvements on ip’s (which obviously have significant depreciation and taxation benefits) and value adding benefis??
your thoughts would be appreciated.
Eric.
If your intent is to stay in your PPOR for a significant amount of time, I would use the excess cash to pay down the non-tax deductible debts (NTDD).
One of our fundamentals in the past was to carry zero NTDD…it served us well, and still does.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Hi Eric,
Why not do both?
Use the surplus cash to pay down some non-deductible debt and then set up a line of credit/equity loan to do the renos.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958Excellent idea Derek!
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
thanks for the response.
yes, i should have noted on the original post that i wanted to do both. and as we are intending to stay here for the foreseeable future, paying down the loan makes sense.
thanks again,
Eric
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