Hi,
A quick question. If I buy 2 +CF IP’s, around 100K each and use 40K deposit what should I then do with the remaining 60K I would have left. Put in in offset to decrease the interest on the loan or a managed fund. In which situation would I be better off. I know I could use it to buy more IP’s but I want to start slow and not jump too far into the deep end.
Ideas please from the financially savvy.
Thanks in advance,
Rachel.[biggrin]
Hi Rachel,
I am assuming these will be your first IPs – if so I suggest you are on the right track.
Start ‘slow’ (if you can call two properties slow) and build up as you get yourself established.
Buying the property is only one part if the equation – managing and maintaining it with associated changes to cashflow volumes can take some time for some people. As a consequence you may need to develop some ‘business’ like process to assist this aspect of your journey.
And then when you feel comfortable you have sufficent funds to use as a ‘deposit’ on additional properties.
For me – I would leave the additional funds in an offset account – linked to one of your property loans so the interest bill is reduced. This will serve to either reduce your I/O payment required or speed up the debt reduction process depending upon the way you are treating your loans.
Hope this helps
Derek
[email protected]Read my comments? Think I can help you? PM or email welcome.
definitely use offset account rather than put it into a loan, if this is what you decide to do. If you put it into the loan, and then decided to pull it out for private purposes it would be a non tax deductible amount, and your accountant would have to work it out separately.. Easier if its in the offset account to start with.
CastleDreamer
You must be logged in to reply to this topic. If you don't have an account, you can register here.
