- Andrew6Participant@andrew6Join Date: 2003Post Count: 7
We are a young family and looking to buy an investment property and would like some feedback on our strategy.
We live in Perth and are currently paying our reidential mortgage off (house value = $280k, mortage = $190k). We have an additional $50k cash to invest and think the best thing to do is to put this money into long term rental properties.
However at the same time realise we need to put as much money into our residential mortagge as popssible.
We plan to buy a property (unit or house) for < $200k which we can hopefully positively gear (on a P&I loan) and hold for the long term using our savings. What is this the best thing to do? Should we buy and rent privately, or consider property funds, or put all our spare cash into our residential mortgage to minimise long term interet?
Thanks in advance for the advice!TerrywParticipant@terrywJoin Date: 2001Post Count: 16,213
If you have an extra $50,000 in cash, why don’t you put it off your home loan and then redraw it again to invest. The itnerest on that portion should then be tax deductible – use a split loan if possible to make it clearly separate. That way you reduce your non deductible debt.
If you can buy +vely geared property the rent from this can also help pay off your home loan quicker.