Bills IP

[Moneyman_85]

Very interesting, so your keeping all your cash then. How big is the LOC per property?

 

[Tranquilo]

I'm not in a position to have 80% LVR. But when I borrowed the equity form my PPOR to pay for the deposit for the IP I didn't use all of it. Can I draw on that to pay some expenses?

Is that OK to do that.

 

[Rixter]

Is that OK to do that.

I think what Terry has said here may also apply to you.

Where was your IP deposit drawn from (ie loan structure type) and much in surplus funds do you have available ?

As long as your tax deductible IP loan structures are kept completely separated from you non tax deductible personal loan accounts you should be okay to pay investment expenses from it.

 

[Tranquilo]

OK thanks got it now thanks Rixter. Just a few $ that's still in the redraw from my equity release. Yes completely separate from my everyday money.

 

[Rhinsor]

Where has the extra $10k gone? if you have $10k in redraw then you could borrow to pay expenses on the investment. Just don't transfer to a savings account, even briefly.

Yes it'll be sitting in the investment loan account as a redraw.
If the bank moves the left over fund into my savings account will I have to make them remove it and put it back?
Hasn't happened yet but I have a feeling it could.

 

[Rixter]

Yes it'll be sitting in the investment loan account as a redraw.
If the bank moves the left over fund into my savings account will I have to make them remove it and put it back?
Hasn't happened yet but I have a feeling it could.

Why would they move it?

Why the feeling?

 

[Terry_w]

Yes it'll be sitting in the investment loan account as a redraw.
If the bank moves the left over fund into my savings account will I have to make them remove it and put it back?
Hasn't happened yet but I have a feeling it could.

if it goes into the savings account interest deductibility would be lost.

 

[PHP]

Hi Tranquillo,

Thanks for posting this. I also have the same questions in mind.
Sorry to be hijacking your thread but i will ask the same question for my mate's situation.

Rixter / Terry,

Friend has 57k in redraw (equity release loan)

After first IP purchase, the equity loan will drop down to 12,000.
Is it best to:

- open a new account to which all rent will be deposited to.
- use the 12,000 left from the equity loan to pay for bills (rates, insurance, repayments)

OR

- use the equity release loan as an account where all rents paid will be directed to.
- use the same redraw account for all outgoing expenses (rates, insurance, repayments.

At this point, the equity released loan is completely separate and is not intended to be used for personal.

 

[Tranquilo]

Of course don't be silly. I hope this thread can help you too

My little bit left from my equity release I'm using for my rates ECT