Derek's got a good point – $30k won't be enough for a $500k PPOR in Syd.CheersJamie

Hi there

Welcome to the forum.

It’s difficult to comment without knowing the numbers but from a finance perspective, if you have enough usable equity I’d certainly opt to use that as your deposit/costs for your next IP rather than use your cash savings.

This way, you keep the entire IP debt tax deductible and also preserve your cash savings…[Read more]

I think you're right.Not long until we find out CheersJamie

I think they'll drop. But I've been wrong before.CheersJamie

Nathan Birch is your man  – https://www.propertyinvesting.com/forums/property-investing/general-property/4343429CheersJamie

Henry Adams wrote:

Jamie M wrote:

booge wrote:
As far as IO goes, at what stage do you pay down the principle? Or is it just left IO until you sell it? Always wondered what people did and why in this situation.

As Richard mentioned above your post – you roll it over into another IO term.CheersJamie

So the IO loan has other name called…[Read more]

Hi and welcome to the forumI don't know the specifics of those suburbs but there are many investors on this forum with properties in West Syd.Yes, the socioeconomic situation isn't the greatest but as you've mentioned – the buy in is relatively low (compared to other parts of Syd) and the yields are quite good. I'd be looking for something with…[Read more]

booge wrote:
As far as IO goes, at what stage do you pay down the principle? Or is it just left IO until you sell it? Always wondered what people did and why in this situation.

As Richard mentioned above your post – you roll it over into another IO term.CheersJamie

Hi MelvinI'd just take up Richard up on his offer above. Get a pro to sort it out for you – that way, you don't need to worry about the structure.CheersJamie

Solomon10 wrote:
I have wondered this too for a ppor,suppose im quite sure i will be there a while, what is the difference for having say a 200 k mortgage with no offset,paying it down to say 110 k,to having it the same 90 k in an offset account? Will the ato be sus if i found another house to live in and just pulled my 90 k out to use on the…[Read more]

Paullie has provided excellent advice above. If you're an undisciplined saver and will only make the minimum interest repayments then IO with an offset is not for you. You're not necessarily drowning in debt if you make regular repayments into your offset and avoid withdrawing (unless it's for a good purpose).CheersJamie

Hi MelvinWhat is the current value of your PPOR and what is the current loan amount?The scenario above – is that the IP you are intending to purchase? CheersJamie

Hi property seekerIt's a dangerous strategy and given the new credit legislation it shouldn't be possible as you need to identify what the LOC will be used for and "living off equity" ain't going to cut it.You're assumption is correct. Your debt will continue to rise. Therefore, you're relying on your portfolio to continually grow in value. What…[Read more]

Hi LizWelcome to the forum.My preference has always been to purchase the PPOR first and then use it as a stepping stone towards your first IP.How? Look to purchase something that can do with a cosmetic renovation. Nothing structural/difficult – just simple stuff that will add immediate value such as new paint, flooring, ect. After that, have the…[Read more]

Hi ChrisAnother thing to note is that ANZ are just one lender with one way of calculating borrowing capacity – and their calculator is not the most generous. If you are able to (and want to) service a higher loan amount then there are other options.CheersJamie

Might be worthwhile getting a second opinion and having someone like Richard take a better look at the current structure and your options for moving forward.As Richard mentioned above, not all lenders taken into account 100% of the debt when you hold the property with another party. In example, we recently arranged finance for an IP for a client…[Read more]

I’m with you – I would have thought the final condition report would put an end to things. I’d argue the case with the new PM. Have they released your bond?

Cheers

Jamie

I agree with Terry and your broker. This will ensure the total borrowings against the IP is deductible and you get to hold on to your cash savings.

Cheers

Jamie

You can work out interest only on a calculator.Loan amount x interest rate = interest payable per annumDivide interest payable per annum by 12 to work out monthly repayments or 52 for weekly.CheersJamie

Paullie wrote:
boogeIf I were you, Id refinance the PPOR as interest only with offset and the IP as IO.Put any extra money into the offset for your PPOR.This way you are taking full advantage of the deductibility of the IP loan.The reason to have the PPOR as interest only with offset is in the future if you move house and that becomes an IP, you…[Read more]