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So for the purpose described, it is best to go with the home loan with offset? LOC does not seem to be worthwhile if your investment horizon is not going to be longer than 15 years. And I guess you can always refinance the standard home loan to extend the interest free period for investment...

So is it fair to say that the consensus from this thread is that to access equity from an encumbered PPOR in order to get deposit to invest, having a home loan with 100% offset, without using offset funds for personal use is better than LOC in terms of lower cost and taxation clarity?

Instead of LOC on PPOR, is it possible to get an ordinary home loan against the PPOR with full offset? So I would get a 600k loan against PPOR and put it all into the offset and when it comes to buy IP, I would withdraw from offset. I understand that this option is cheaper than LOC. And if I...

I hope my PPOR value grows because I think it has actually gone down since I bought it in 2010. And I am not sure about active income growth over time. I run a small business and there is no guarantee of anything. And hopefully, I can stop running the business as soon as the passive income...

I agree with you that cash is the worst, especially with interest rates so low and that is why we are here to discuss best use of funds for the best investment. However, what I have learnt from here is that the cash should be placed in offset against an investment loan rather than used to...

BV this is an overly simplistic analysis of the situation. Lets say you buy 3 resi Ips with 1 mil cash. At 6% gross yield, you would be lucky to get $1k in the pocket every week to spend as you please. The net yield would probably be about ?4%, that is under 52k a year after other expenses of...

Thanks very much Handy (your post summarises what I have learnt on this forum over the past year or two), AaronC, Geoffw, HiEquity. I feel that time has not been wasted because I have learnt the theory and concepts behind financing investments during this time as applicable to my situation...

Again my understanding from this forum, is that it is best to obtain maximal leverage for investment purposes. If I did not obtain LOC and I pulled out cash for a 20% deposit from the LOC, it would mean that the flexibility of this cash is lost. Whereas if I preserve the cash and place it in...

I am getting closer BV. I have made two offers in the past twelve months on properties in Sydney - one a commercial IP (medical centre) and one a resi IP on the lower North Shore but have not been successful.

The information I have obtained from this forum is that I should never use my own savings and income for investments, if possible. Or use as little as possible. Hence, the LoC. As I have learnt, it is best to risk others money and the return on investment would be far greater. Capital...

The LOC is approved up to the value of 80% of my PPOR which comes to about 600k. I haven't drawn upon the LOC yet as I have not found the right IP to purchase. Should I be diminishing the value of the approved LOC?

My understanding is that the LOC secured against PPOR is used to draw funds for a deposit (20%) and purchase costs of the IP whilst a separate loan is taken out with a different lender for the balance of the Ip's purchase price.

In the first eighteen months, I was just reading and interacting. It has only been two months since I organised LOC.

I hope to continue to share the trials and tribulations of this journey with you.

Thanks Hi Equity. My thoughts exactly. I don't think that this process can be rushed. Otherwise, I could regret it forever.

Hi Aries, I did not know this before I joined this forum so you are in fine company. Aaron C usually gives good answers to most questions I have about property finances. Loc refers to line of credit. So essentially, I asked the bank to give me a loan secured against my unencumbered PPOR. But...

Thank you. Due to all the regular pep talks that I regularly receive here, which by the way, I greatly appreciate, because it addresses my fears and procrastination, I have actually lined up a LOC against my PPOR for ready action should I ever find the right IP.

Interesting site, thank you - quite a good read for me and my particular interests.

Agreed but my suspicion is that many high earners are probably the opposite - as discussed in "millionaire next door" - you would never suspect that they are high earners from the old cars they drive, the old clothes they wear and the modest house in which they live. Especially if you have...

BV what you are saying is that anyone on a high secure income can rush out there and start buying IPs with much less fear than a low income person simply because there is a much more secure buffer against mistakes, rental vacancies, no CG etc. I don't totally agree with this because large...