Hi guys,
Just wanting to get ideas on what you would consider to be a better strategy (and why)…
Situation… if you have savings… say $10K is it better to put extra cash into existing I.P loans to help reduce them, or is it better to keep the cash and continue saving towards a deposit for another I.P ?Currently I have a few IPs which are all negative geared (
naughty I know) but anyway I was wondering if I should pay down some of the loans or keep adding to the current savings and get a deposit for another IP.
Any ideas would be appreciated!
Cheers JenHey Jen,
I guess it all depends on your situation. If you had any non deductible debt such as a PPOR or credit card bills I would pay that first. If there is no other debts besides your current IP's then I would personally put the money in an offset account. That way you can reduce the interest you are paying on your IP but still have the cash available if/when your ready to buy another IP.
It is best to reduce any non-deductible debt first. And a good idea is to never pay down a loan as once you put the money in, you cannot access it again without tax consequences. The best idea would be to use a 100% offset account so you still get the same savings in interest, but without the tax problems.
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
Thx guys, I never thought about putting the cash into an offset account.! thanks again.
naughty I know) but anyway I was wondering if I should pay down some of the loans or keep adding to the current savings and get a deposit for another IP.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
