Hi all,
I'm new to property investing so please excuse my silly Qns. Have read prev posts (especially Terry's) and just trying to get my head around this.
*Personal situation:
- No PPOR loan (and do not intend to buy a PPOR any time soon), no personal/car loans.
- Have $150k in cash
- In the process of acquiring IP1. Property price $325k. Borrowing 90% with I/O, standard variable and offset.
- Likely to acquire IP2 within next 2 months. Borrow 90% with I/O, fixed.
* Re: offset acct. What I think I'm aware of is:
- Do not put borrowed funds into offset acct
- Offset acct is savings acct/treat funds inside as cash
* Questions:
1. When IP1 settles, what funds to park into offset account?
- wages
- rental income
- lotto winnings (for eg)
- inheritance (for eg)
- dividends (? - will that contaminate the loan?)
2. To avoid contaminating the loan:
- The funds in offset should only be used for investment-related expenses? (IP's annual insurance, council rates, maintenance etc)
- Can I use the funds in offset to pay for personal expenses/credit card bills?
3. If answer is no, then where do I have the money for daily expenditures? Do I deposit 80% of wages into offset and keep 20% out? Originally I'd think to have every single income credited directly into the offset acct. (Sorry this must be a dumb qn to you guys)
Thanks and appreciate any feedback/comments!
I'm new to property investing so please excuse my silly Qns. Have read prev posts (especially Terry's) and just trying to get my head around this.
*Personal situation:
- No PPOR loan (and do not intend to buy a PPOR any time soon), no personal/car loans.
- Have $150k in cash
- In the process of acquiring IP1. Property price $325k. Borrowing 90% with I/O, standard variable and offset.
- Likely to acquire IP2 within next 2 months. Borrow 90% with I/O, fixed.
* Re: offset acct. What I think I'm aware of is:
- Do not put borrowed funds into offset acct
- Offset acct is savings acct/treat funds inside as cash
* Questions:
1. When IP1 settles, what funds to park into offset account?
- wages
- rental income
- lotto winnings (for eg)
- inheritance (for eg)
- dividends (? - will that contaminate the loan?)
2. To avoid contaminating the loan:
- The funds in offset should only be used for investment-related expenses? (IP's annual insurance, council rates, maintenance etc)
- Can I use the funds in offset to pay for personal expenses/credit card bills?
3. If answer is no, then where do I have the money for daily expenditures? Do I deposit 80% of wages into offset and keep 20% out? Originally I'd think to have every single income credited directly into the offset acct. (Sorry this must be a dumb qn to you guys)
Thanks and appreciate any feedback/comments!