Is using the equity in your house a good way to start investing in property.
Hi Mike,
Certainly speeds up the process as it maximises the returns on the assets you own either partially or outright.
If you were saving cash for a deposit you only get to ‘save’ that part of the dollar that has been left after the ATO and your spending hanits have taken their little chunk.
Derek
[email protected]
0409 882 958
Property investment advice and researched property in quality locations available.Hi Mike,
Agree with Derek, using equity to acquire or expand an investment portfolio is fine,
If the equity is derived from your PPR ensure the increased loan/refinance is structured as an investment loan, this will ensure the deductibility on the investment is not contaminated by the non-deductible debt attached to the PPR.If the equity is derived from an existing investment then it would still be beneficial to keep the new loan separate and ovoid cross colaterisation over the 2 investment properties.
BTW, I spent some time in Bristol quite a few years ago and found parts of the West Country, Bath etc very picturesque. Cheers.
Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
I would never, ever use my PPOR as security on investments. Investments can lead to luxury, but warmth & shelter are two of life’s most basic needs. Why risk it? Learn to save instead.
Cheers, F.[cowboy2]Hi Foundation,
Providing your loans/finance is structured correctly, it is possible to avoid cross colaterisation and use equity in a PPR for the purpose of investment and not have the PPR held as security over the investment, Cheers.Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
How long would it take you to save 1 million dollars?
How long would it take you to borrow 1 million dollars to invest?
[biggrin]
Just some thoughts
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Originally posted by Mobile Mortgage:Hi Foundation,
Providing your loans/finance is structured correctly, it is possible to avoid cross colaterisation and use equity in a PPR for the purpose of investment and not have the PPR held as security over the investment, Cheers.Yes, I’m aware of this, however, many investors still use their PPOR as security… which was my point.
However, I’m also aware that even simply raising the LVR of my PPOR mortgage(s) to 80 or 90%(mine currently sit at around 0.75%![biggrin]) would expose me to the danger of negative equity as house prices fall. Negative equity can prevent ordinary people from moving house, buying a new car, or even replacing a broken down washing machine in the worst case… Not my cup of tea.How long would it take you to save 1 million dollars?About 50 years.
How long would it take you to borrow 1 million dollars to invest?About 2 days. And I wouldn’t need to stake my house and my future stability on it.[biggrin]
Cheers, F.[cowboy2]Yes, I’m aware of this, however, many investors still use their PPOR as security… which was my pointNot sure if this is the case, but I recently was talking to a mortgage broker with respect to an investment loan, and whilst I don’t have a PPOR, he was recommending that I cross-collateralise one of my other IP’s with this new loan. My circumstances did not require it.
I dismissed this out of hand, however for someone who is new the IP, they may have pursued this on the advice of the MB….[thumbsdownanim
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