Property Investor by default

Hi Xodiac.

So the house you live in in bris is your PPOR. that means your 240k loan is not tax deductible.

Your Cairns IP loan should be tax deductible, well the interest component of your repayments, anyway.

What would make sense is to switch the Cairns IP to an IO loan, and the reduction in what your repayments are, channel that surplus $ into your PPOR loan (as extra repayments/offset account). this will reduce your non tax deductible debt first. (might only be $20-40 a week that you can instead of paying off your principle in your cairns property channel toward your ppor loan).

You can continue to channel all your surplus $ into your PPOR loan if you can redraw it or have an offset account this could work well for you, and then if you desire to buy another IP you can then pull some of it out to get your deposit or use your equity and make your new IP an IO loan too so you have more capital?

You would need to check that you can change your cairns IP loan to an interest only loan without costing you the earth/negating any benefit you might earn too.

im definitely not an expert on the subject but the above is just what ive read/learnt and heard of others doing.

I agree with damit

you want to pay back non-deductible debt first before paying off any investment debt. So change the IP loan to IO asap. This will reduce the repayments which you can then use to pay off the PPOR loan.

Instead of using any cash for another IP what you should do is to pay down the PPOR loan and then reborrow it for an IP. (preferably set up a LOC or a separate account). You will be increasing deductions this way which will release cash to pay off even more of that PPOR loan.