Hi Guys,
I am from Melbourne, last year I bought a IP for $180,000 and I owe the bank just under
150k mark. It’s currently being rented out and I only have to fork out $60 a week to meet repayments out of my own pocket. (Current house has 4 bedrooms sitting on a block of land of the size of 650 m3, its located in the western suburbs)
By the end of the year I will have saved around 25k + mark.
Im am not sure if I should invest in a block of land or purchase a small unit or even put the money into my loan.
I just need some ideas what would you do if you where in this situation or what did u do if u have been in this situation
Cheers
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
What are your medium term goals for your investing?
I would say with 25K, and since u only have one IP, I would go for IP2, which MAY be a small unit, or perhaps a cheaper house….
Good luck!!!
If you have any sort of consumer debt (car loan, credit card, furnitureloans etc) then use the cash to wipe this out straight away. If there is any cash left over put it on the loan.
If you have the correct loan that allows you to re-access the money you pay onto the loan, I would be putting the money into the loan until you are ready to invest again; unless your savings account is returning a better interest than what you are being charged on your investment loan? (I'd doubt it).
Every cent of debt reduction you can make will improve your cashflow (unless it is a fixed repayment loan) and increase your overall equity and save you thousands in interest over your life – more wealth.
Some people advocate never paying down investment debt as it is tax deductible. This makes sense to me if you have consumer debt – clear that first, but any debt reduction is a good policy; especially if you are planning to keep accumulating properties, as your equity position or LVR (Loan to Value Ratio) and your debt servicability will be healthier.
Hi Mortgage hunter, Thanks for your reply, well im only 23 so im in a prime position. As for IP goals I am aiming to have three investments under my belt before im 30. 1 property to eventually live in (I currently live with parents), one to rent out and to reduce my tax and one more to also rent out and once it has enough capital behind it use that money to invest in other venture.
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
<a href="/user/handy-andy" title="cssbody=[bo_user_body1] cssheader=[bo_user_hdr1] header=[<div class="boxoveru_header">Handy Andy</div>] body=[<div class="boxoveru_body"><a href="/user/handy-andy">View Public Profile</a><a href="/search?edituid=51114">View all posts by this user</a><“>Handy Andy Thanks for your reply I will keep it in mind
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
La Aussie, How are you?The only debt I have is my house loan and that’s it. I might put 8k on my loan and keep the rest for future investment my loan only lets me put an extra 10 k a year on top of my normal repayments.
In terms off future investments im not sure which direction to move too??????
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
hi johann,
If it were me I would use the surplus cash for your next IP, depending on your serviceability (wages, expenses, cashflow etc..)From the small amount of information it appears you are in a healthier position than most in your age group.
(PS: Any reason why you can't develop/subdivide your West suburban 620sqm block?)Hutch
Hi Hucth,
Thanks for yoyur prompt repsonse i will most likly consider that path in the future at the moment the house is being rented out and im getting a good return on it. When the house gets a bit more older i will demolish the house and build.
It seems like every one is suggesting a IP rather then a block or land
very intresting to see what other people saythanks mate
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
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