Hi Guys,
wondering if anyone can offer any suggestions and advice on how I should finance my 3rd IP.The IP's I own are both financed with ANZ P&I loans. Should my next loan be P&I or IO and why? what are the benefits of each?
IP1 – Unit – worth approx 90k, loan 73k, fixed interest at 7.2%. rent is 110/wk and repayments are 120/wk.
IP2 – House – worth approx 150k, loan 115k, variable interest, current rate is 7.9% (i think) with the ANZ breakfree program. rent is 190/wk and repayments are 195/wk.
I probably have around 5k cash on me right now and am looking to buy another investment ASAP (anywhere between 120-250k depending on what i can find). As you can see my properties I own are basically neutrally geared, they cost me roughly 5k a year. I am looking for another similar investment which will basically pay for itself. I save around $600 per fortnight. Am i better off just saving another 15k or whatever for a deposit, or am i better of putting all the spare cash into my variable loan (for IP2) and getting the loan balance down to around 95-100k and then using equity to finance my next property?
If anyone has any advice on this, or can point me towards some useful posts that would be fantastic and very much appreciated.
Thanks again,
Rohan.i beleive that all loans should be IO. This will result in reduced payments so you can invest the savings elsewhere – and it still gives you the option of paying extra off the loans if or when you decide. Any spare money should be in the 100% offset account – which hopefully you have set up under the breakfree package. Put all your savings in the offset and use this for the next property.
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
You must be logged in to reply to this topic. If you don't have an account, you can register here.
