60K to spend the best property Options

Whatever you do, I think paying the $60,000 off your home loan first would be a good option. This will save you interest – interest which you cannot get any deductions for. Once you pay it into the loan you can then reborrow it and claim the interest if you use it for deposits on investment properties.

You are in for some fairly advanced calculations, but…

I'd go through the TOTAL savings of paying down your home loan, over, say 3 years…

then see how that amount stacks up against what else you can do with it.

Personally, with 60k  I'd try to control about 6 houses that return $100/week each (clear) plus a lump sum of about $30k each within the 3 years.  If you are good at negotiating you might be able to control more than 6 with that cash, but I tend to use about 10k to get control of a house via a Lease Option when using a real estate agent.  However, [1] you'd need to know what you were doing so as to minimise risk to virtually zero (this knowledge costs about 3k to get quickly), and [2] your wife would need to be comfortable with it, otherwise it's not worth the exercise.  Wives are more important than money!

I'd calculate the total income over the three years (less tax), compare it with the pay-down-home-mortgage scenario and make my decision then.  Then use the gross profit to purchase a buy-and-hold type property (a "keeper" with low maintenance high yeild etc).  This is a lot more messy and difficult that paying down the home loan, so you need to decide if it's worth your effort and time.

You, however, may prefer to purchase one property in the "normal" way using the 60k as deposit, and then wrap or lease-option it to return at least 100/week over your payments, plus a lump of profit of around $30k within three years.

All depends on where you are in your investing career, your expertise, time available, and tolerance to risk.

…but you did ask us what WE would do.  

Cheers

Mr Fair Go