To offset or not offset??

[kcrosby]

Hi guys, I'm a brand spanker to the world of property investment, with mine and my partners first IP settling yesterday.

The IP was bought for $335k in Parramatta and we have $20k leftover.. what are your thoughts on 1) putting the cash in our offset account, thus reducing payments on our Int only loan and increasing our cashflow? or 2) withdraw the money and use it to purchase a 2IP?

:p

[Simon]

Put into an offset account against a home is the best.

Put the cash into a high yielding cash account in a spouses name if he/she is on a lower tax bracket.

Use it as a deposit whenever you choose to reinvest. Don't just reinvest cos you have $20K to spend :)

[Rob Williams]

Park the surplus funds onto an offset. It will save you quite a bit in interest each month.
I've recently started having my rents paid into an offset account and the monthly interest payment deducted from there. Even the shortfall I pay out of my salary gets put into the offset.
Every dollar you park in there will save you interest for the time it's parked there.
Keep your savings in there, too!
When you're ready for another IP, the money will be sitting there, waiting for you.
Congratulations on your first IP! Have fun with it.