karlm63Participant@karlm63Join Date: 2005Post Count: 68
Just a quick question,
If I was to direct the rent back into the Investment Property loan would I be allowed to leaverage those funds say after 3 yrs of accumulative rent and buy another Investment Property.
After purchasing the second I/P redirect the rent from the 1st I/P to the PPOR and repeat the process over again ?
Just a thought !!!!!!!!!
My accountant says it is ok to do it because you are not using the funds for Private / Personal use !!!!!
I am not sure of advantages or disadvantages !!!!!!!
Any thoughts or input would be appreciated.
Thanks karlmducksterParticipant@ducksterJoin Date: 2004Post Count: 1,674
Investigate with your bank on having an offset account linked to the PPOR loan?
You can reduce the interest on the PPOR and when you need a deposit for IP2 you can take it out of the offset account.
You can link it to IP1 but then you reduce the interest costs but this causes less tax reduction if negative gearing.
You can take the offset balance savings money and use it for the next deposit on ip2 .morrissue70Member@morrissue70Join Date: 2010Post Count: 17
I agree with duckster an offset account is the way to go. I have an offset acount set up and use it to manage funds for my entire portfolio. You only need one. You dont have to pay high premiums for a feature like this either, a loan I have is at 6.89% with an offset account.karlm63Participant@karlm63Join Date: 2005Post Count: 68
One thing I did forget to mention is the type of loan I have is a line of credit, portfolio with St George.
Thanks karlmmike.12Member@mike.12Join Date: 2010Post Count: 36
Karlm & mates,
I have a offset acc with PROR and 1 IP,I am in a process of buying 2nd IP,and MBrooker suggested that you can have both set up together ,off set and line of credit.
Only difference is ,the salary,dividents, will go into offset acc.The rent will be detected in each IP,and any short fall in payment (taking into account IP is neg geared).
The short fall will go into a account saying capitalizing ie line of credit.The only difference is the interest rate of line of credit is bit higher.
I am with ST George.
OFF SET Interest is 7% and line of Credit 7.1%.
This is how i understood.How is your line of credit set up Karlm.
I would like to get your views on this mate,I get confused on this.