Hi Every one,
Silly question here….
At the moment I am saving for another IP, I won’t be using the equity from my other IP and PPOR. (Equity used for my business) and I personally want to keep this investment separate.
Our Scenario is this:
Current PPOR Loan: 98K (CBA) linked with a MISA account
Personal Income: We usually can save between 2K to 4K per month from our personal income
Business Income: We are currently putting any additional cash flow from the business into the business loan
With our savings, should we continue to put all the money into the MISA account until we find a property “etc” or put it into a online savings account….
CheersJamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069
MISA account because if you place it in a savings account you'll be taxed on the interest.
When it comes time to buy the next IP, look to "borrow" the funds rather than use "cash"
JamieDerekMember@derekJoin Date: 2004Post Count: 3,544
Offset rather than savings for the very reasons Jamie mentions.Jacqui MiddletonParticipant@jacmJoin Date: 2009Post Count: 2,539
You can have your cake and eat it too. You can fiddle with the mortgage in a very specific manner and use equity to buy the next IP, but still have the other IP standalone. Jamie M has already responded, why not get in touch and talk to him about how best to do this.JPS25Participant@jps25Join Date: 2010Post Count: 121
Definitely in your offset as will will help reduce the interest added to your mortgage
We started investing in properties end of 2009 and have now paid out our PPOR
Everything extra now goes into an online savings in my name ( I am not earning so no tax) and Investments in hubby's name
We do have an offset with IP accounts but choose to use it just for rents in and interest out
Agree with JacM use equity not cash for IP'sjmsrachelParticipant@jmsrachelJoin Date: 2012Post Count: 711
offset account. Saves you interest.jmsrachelParticipant@jmsrachelJoin Date: 2012Post Count: 711
Which suburbs / area are you looking for your next ip? I think last time you were talking about buying something in Chile?
Thanks for all of your comments, Sounds like the perfect option, Invest the extra cash in the OFFSET….
We have one in CHILE already (paid off) our bank manager in CHILE has organised a finance for us all ready. We head down their in JUN 2013 to buy another IP.
My goal is to buy another one in Melbourne during the year,Maybe in Werribee not to far from Watton Street,mattstaParticipant@mattstaJoin Date: 2011Post Count: 604
Of course, offset accounts instead of savings to prevent taxes and interest. Good luck!