All Topics / Creative Investing / P/I or Interest only

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of Invest4futureInvest4future
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    @invest4future
    Join Date: 2010
    Post Count: 2
    October 28, 2010 - 5:25 am

    Hi – I'm a new member, my first post

    Would like some advice/assurance please thank you

    Currently have a PPOR, Value = $200k, 0we $125K and Investment value $220k Owe 208K

    I was advised to Refinance current PPOR into Intrerest only, top up and access equity $54k approx

    Make 1 payment every 12 months on investment property using equity. $14K approx
    Divert rental payments $845 per month and wages into PPOR interest only loan.. 

    Later using the remaining equity towards another investment property?

    Hope this makes sense!
    tom

    Profile photo of dnshulldnshull
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    @dnshull
    Join Date: 2010
    Post Count: 27
    October 28, 2010 - 11:30 pm

    Hi Tom

    Who advised you? your Accountant or m/broker ? Sounds like a complicated setup, did they say  what were the benefits to you for setting it up like this? How would this make it easier to buy another property?

    Regards,

    Dave

    Profile photo of Invest4futureInvest4future
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    @invest4future
    Join Date: 2010
    Post Count: 2
    October 29, 2010 - 12:02 am

    Hi dave

    Who advised you?
    Broker has clients using this system, could also be called loc i guess..

    Benefeits would be i yearly payment into I/p intrest only loan reducing intrerest! payed from equity.
    collect your wages and rent and deposit into PPOR interest only, reducing interest and using equity to by another I/p..

    Any other comments welcome

    Reguards
    Tom

    Profile photo of dnshulldnshull
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    @dnshull
    Join Date: 2010
    Post Count: 27
    October 29, 2010 - 12:16 am

    Thanks Tom,

    I would run it by your accountant first, sounds ok to me. Not too diffrent from how my IP is structured.

    Good luck,

    Regards,

    Dave

    Profile photo of Nina_10Nina_10
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    @nina_10
    Join Date: 2010
    Post Count: 6
    October 29, 2010 - 1:58 am

    about Tom’s question, what are the benefits of this type of property investment and will he ever own the property?.
    or is this investment a tax cutting way of saving money only?
    regards
    Nina

    Profile photo of CatalystCatalyst
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    @catalyst
    Join Date: 2008
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    October 29, 2010 - 7:36 am

    Where are you getting the $14K? Out of your equity? So you put $10K rent in and take $14K interest out? plus other costs?
    I doubt you can make just one payment a year. The interest would keep getting added on each month so it would be more than $14K in the end and you don't have enough equity in the investment..

    I don't see the point if your PPOR is interest only.

    I know some people divert the rent to their PPOR and use a LOC to pay the interest on the investment property. Thus reducing non deductible debt.

    Maybe I have misunderstood?

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