Forums / Property Investing / Help Needed! / PPOR nearly mortgage free…. whats next?

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  • Profile photo of ScottScott
    Participant
    @ttbrewer101
    Join Date: 2015
    Post Count: 3

    My wife and I will pay off out PPOR mortgage in about 5 months time (wahoo), + We have 4 invest properties.. rough break down:

    1st) Value 440K (mortgage free and rented)
    2nd) Value 230K (90K mortgage IO loan with 100K off-set, rented)
    3rd) Value 270K (175K mortgage IO, rented)
    4th) Value 390K (380K mortgage IO, rented)
    PPOR) Value 520K (soon to be mortgae free)

    All of our rent and salary is going onto our PPOR mortgage to help get rid of it.

    Any suggestions on what we could do next?

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Easy. You can:

    *Buy more property
    *Don’t buy more, instead pay down debt
    *Sell down some properties
    *a combination of any of the above

    The issue with your question is just the same as a person walking up to you and asking “should I turn left at the intersection, or right?”. You can’t answer the question without knowing where they are wanting to go.

    So instead why not answer this question: Why are you investing? What are your goals?

    That should help dictate what to do from there. You can’t plan your course without a destination.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of ScottScott
    Participant
    @ttbrewer101
    Join Date: 2015
    Post Count: 3

    My (our) destination is early retirement with a great lifestyle (like most i guess)
    im 36 and my wife is 40 all of our decisions to date have been geared towards our retirements (that is buying property to fund a great retirement)…

    Once our PPOR is paid off do we go again for another IP or look at paying down some of our IP mortgages?? I think paying of the PPOR mortgage has got me in a bit of a tissy (a good one of course)

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    Why not use the offset on IP 2 to pay off the PPOR debt now?

    I would start saving cash in another offset against an IP – the one with the highest rate and/or the one in the name of the lowest income earner of you and spouse.

    While doing this work out a plan. How much income do you need and how many more properties. Then buy those properties.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    You’re in an awesome position – well done.

    How much income do you need in retirement? Can you get it from your current portfolio if the debts were all eliminated?

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Chrisss1010Chrisss1010
    Participant
    @chrisss1010
    Join Date: 2015
    Post Count: 8

    Hi
    Yes your in excellent position , here is my thoughts on what I would do in your position
    $90,000 with $100,000 off set , use lazy money to pay down ppor
    Working with what you have open offset with 4th property put in cash flow from current rentals , should be about $324 week after holding costs and tax also put in what you would of been paying on ppor $400 week , do so for two years total cash in new offset $75,296
    Growth of about 2% year of current investments ($1,330,000 +4%)= $1,383,000 7% yeld -holding and costs = $734 week cash flow
    Semi retirement after two years , saving cash flow in to offset for another two years totalling $76,336
    2% growth on investments over two years now $1,438,000 with 7% yeld – costs = $764 week cashflow
    With $151,632 in new offset account plus current offset of $90,000
    So in 4 years time will have aproxamatly $241,632 in offset can spend at any time liquid asset and passive income of aproxamatly $764 week
    Just my thoughts hope you enjoy retirement

    Profile photo of ScottScott
    Participant
    @ttbrewer101
    Join Date: 2015
    Post Count: 3

    Thank you all very much for your thoughts. I’m a slow learner so ill need to process this. Great detail Chrisss1010 much appriciated.

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