Hi, I'd like to introduce myself, my name is Chris and am currently in my final year of Uni . I've been on these forums before, however have recently started to read a lot more.
I have saved small amounts, however once Uni finishes my savings should substantially increase. I have been thinking about property a lot and attempting to work out plans for my first couple of investment properties. I'm thinking of attempting to obtain a few IP's before buying my own home (PPOR), any opinions on this?
Say if in two years time I have $40,000 in savings on say $45k pa. I decide to purchase my first IP for $350,000 on an IO loan. I'll use $20k as a deposit and use the rest for fees/stamp duty and as a small buffer (Loan stands at $330,000). As an example I'll treat the interest rate at 7.5% with a 5% rental yield. So in this case, interest = $476 p/w , rent = $336. I would experience a shortfall of $140 p/w.
How much of this $140 p/w would be deductible? And also what other aspects of IP1 is deductible?
At the same I'll set up an offset account linked to this loan, and anything I can possibly put into this account will go in.
In several years time, assume this property is worth $450,000. Can I utilise a LOC on this loan of say $30,000 to use as a deposit onto IP2 valued at $400,000?
If so, is 100% of the interest on the LOC deductable as it is used for investment purposes?
Is it correct in saying that it is better to use a LOC so that you don't cross-collateralize with the previous loan.
Or am I going down the wrong track here, and can LOC's only be used on PPOR's?
Sorry if much of what I've said doesn't make sense, I have only been reading this stuff over the last week and haven't been able to stop thinking about. It would be really helpful if i could be given any advice tips, or if I'm looking too far ahead .
For those that read all this, thank you
-Chris
I have saved small amounts, however once Uni finishes my savings should substantially increase. I have been thinking about property a lot and attempting to work out plans for my first couple of investment properties. I'm thinking of attempting to obtain a few IP's before buying my own home (PPOR), any opinions on this?
Say if in two years time I have $40,000 in savings on say $45k pa. I decide to purchase my first IP for $350,000 on an IO loan. I'll use $20k as a deposit and use the rest for fees/stamp duty and as a small buffer (Loan stands at $330,000). As an example I'll treat the interest rate at 7.5% with a 5% rental yield. So in this case, interest = $476 p/w , rent = $336. I would experience a shortfall of $140 p/w.
How much of this $140 p/w would be deductible? And also what other aspects of IP1 is deductible?
At the same I'll set up an offset account linked to this loan, and anything I can possibly put into this account will go in.
In several years time, assume this property is worth $450,000. Can I utilise a LOC on this loan of say $30,000 to use as a deposit onto IP2 valued at $400,000?
If so, is 100% of the interest on the LOC deductable as it is used for investment purposes?
Is it correct in saying that it is better to use a LOC so that you don't cross-collateralize with the previous loan.
Or am I going down the wrong track here, and can LOC's only be used on PPOR's?
Sorry if much of what I've said doesn't make sense, I have only been reading this stuff over the last week and haven't been able to stop thinking about. It would be really helpful if i could be given any advice tips, or if I'm looking too far ahead .
For those that read all this, thank you
-Chris