All Topics / Finance / One LOC for multiple IP’s

Viewing 9 posts - 1 through 9 (of 9 total)
  • Profile photo of propertyjockeypropertyjockey
    Member
    @propertyjockey
    Join Date: 2010
    Post Count: 72

    Hi all,

    I am able to set up a LOC account secured by my PPOR.

    The amount will easily provide deposits for three IP's

    Is using one LOC account for multiple IP's wise or not?

    PJ

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Morning PJ

    Yes most lenders will allow you (subject to income and equity) to establish a LOC against your PPOR and some will allow mutliple splits.

    I wouldn't have an issue in having 1 LOC for multiple deposits because structured correctly you will refinance the IP to draw out the equity and pay down the LOC anyway to allow you to keep on buying further IP's.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Yep, no probs there. As long as the LOC is being used towards investment purposes (ie. deposits on IPs) then the entire amount will be deductable.

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    I agree that it should pose no problems if all the LOC is used only for investment purposes.

    But if you have the option why not split it up into several sub accounts in case you wish to use one for private expenses later? You may also want to capitalise interest on one and keep it separate in case you have problems with deductibility later it will be clearly distinguishable.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of propertyjockeypropertyjockey
    Member
    @propertyjockey
    Join Date: 2010
    Post Count: 72

    Thanks guys for the confirmation.

    It is always appreciated.

    PJ

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    Terryw wrote:
    But if you have the option why not split it up into several sub accounts in case you wish to use one for private expenses later?

    Agree, if your LOC allows for multiple splits than you should take advantage of it.

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of jonmardelljonmardell
    Member
    @jonmardell
    Join Date: 2010
    Post Count: 20

    i would personally split it into separate sub accounts for each property cause there is then no grey area in regards to what debt is associated with each property if you sold one.

    Profile photo of propertyjockeypropertyjockey
    Member
    @propertyjockey
    Join Date: 2010
    Post Count: 72

    Hi all,

    When we say

    "……split it into separate sub-accounts"

    are we saying there will be totally separate bank accounts each with their own fees etc?

    Is this purely a bookkeeping thing? If it is, my wife is a book-keeper and could easily set up a set of boks for the LOC account within which would exist a number of transactions attributable to specific properties. These properties wthin the books would have their own assignment numbers. The LOC account would be run as if it was a business in itself.

    PJ

    Profile photo of jonmardelljonmardell
    Member
    @jonmardell
    Join Date: 2010
    Post Count: 20

    hi property jockey, split sub accounts means separate bank accounts for each loan. most lenders have packages that allow this with no extra fees.

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