It is always a very nice thing to keep a substantial cash buffer in an offset account. This helps you save on mortgage interest but is also a supply of readily-available cash in the event of scenarios such as periods of unemployment.
This can be achieved by going for a higher LVR, thereby keeping funds in your control rather than handing them over to the bank in the form of large deposits.
My major concern is employment, what happens if one of us loses job.?
In that case you have to plan for it. What would happen cashflow wise for example – hopefully a rented property wouldn’t be costing you much money per week. How easy would it be for either of you to find a new job, how long would it take for example.
I have a friend with one unencumbered investment property and a main residence at 80% LVR, yet he is terrified of ‘risk’. He won’t invest at all. He only ended up with a new main residence because of moving interstate for work.
I also know people who are buying their 5th property on 90% LVR loans. Much more risky yet they don’t worry (openly any).
Have you been to see a financial adviser at all? One of the first things they may mention to you is to look into some life insurance and income protection so you are covered with your investments should you be out of work. On top of this you can shape your portfolio to be as passive or aggressive as you feel comfortable with. It really depends on what you are looking to gain from your portfolio which should determine how aggressive you choose to be.
The first and most obvious question is, are you contemplating another IP purchase in your own names, or are you contemplating setting up a Self Managed Super Fund and using your superannuation money as deposit and buying costs on the IP? I'm guessing you'd have sufficient funds in your super to fund a hefty deposit on at least two properties, and with the correct yield, they'd be paying for themselves, such that they'd be paid off by the time you're retired. Hello tax-free rental income!
5.15% is a bit on the low side for yield – certainly when you are no doubt wanting the properties to be debt-free or close to it by the time you hit retirement age.