Need some help & some direction

Viewing 5 posts - 1 through 5 (of 5 total)

Jpcashflow
Participant
@jpcashflow
Join Date: 2007
Post Count: 575
October 18, 2008 - 12:12 am
Hi All,
My name is Johann I am 24 year's old from Melbourne. I would like to turn my goals into a real thing!!!
I currently have one IP which is being rented out at $265 per week. I only own $153,000 on it. I bought it three years ago for $185,000 & it has been valued at $280,000.
I earn $750 a week from work and I live with my parents and i have no bills apart from, fox-tel and mobile.
– By the end of the year i will have saved $40,000 in the bank.
My goal in life is to own three properties (All Paid off), Two being rented out and one for me!!!.
Would you use that $40,000 in cash and put it toward my current loan?
or use it to make the move to purchase my second property?
– What would be the best way to have all these assests paid off
Any advice will be good and this thought has been making me feel anxious lol…
Cheers
Johann
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
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Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
October 18, 2008 - 12:16 am
Hi Johann
Never pay off a property loan. Use a 100% offset account instead.
Once you pay off a loan, especially an investment loan, your money is trapped. What would happen if you wanted to buy a home to live in? You would have used up all your cash and would have to borrow to buy – and pay non deductible interest.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
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Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
October 18, 2008 - 12:27 am
Hi Johann
Never pay off a property loan. Use a 100% offset account instead.
Once you pay off a loan, especially an investment loan, your money is trapped. What would happen if you wanted to buy a home to live in? You would have used up all your cash and would have to borrow to buy – and pay non deductible interest.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Jpcashflow
Participant
@jpcashflow
Join Date: 2007
Post Count: 575
October 18, 2008 - 12:58 am
Hmm that is an intresting point!!!
but in this current econmy wouldnt you rather have no debt etc?
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
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Your first port of call in finance :)
Richard Taylor
Participant
@qlds007
Join Date: 2003
Post Count: 12,024
October 18, 2008 - 6:22 am
No but i would rather have access to cash as per Terry's suggestion.
Richard Taylor | Australia's leading private lender