Gidday to all, this will be my first IP. Firstly my situation. I am soon to be moving out of my PPOR and will be putting it on the rental market as my first IP. I am moving to a new state, where I will be living under Government subsidised rent. I will be able to take advantage of this subsidy for at least 3-4 years. I am planning on taking full advantage of this, and will secure another IP immediately. I have crunched some basic numbers, with the two properties we can achieve a LVR of 84%, and a DSR of 88%. So from the lender point of view we shouldn't have too many problems.
Now I want to get these investments set up properly in the first instance, rather learn any costly mistakes. To add to the equation, I have had a windfall of around $30,000 which has not been commited anywhere yet. Obviously I could put it staight into my plan to reduce the aforementioned %'s, but I don't see this as an advantage as I could qualify for the loans without it. The other option is for the second IP to be set up as an offset P&I loan (putting the 30 grand in as offset). We would concentrate all cash flow in to this account, letting it grow for future IP's. The first IP will have an IO loan.
That is my plan at this stage. This will be, hopefully, put into place early next year. Any comments or life experience with this plan, or similar, would be appreciated. Also any suggestions of better approach. As I said, I want to get it right the first time, so let me have it!!!!!
Now I want to get these investments set up properly in the first instance, rather learn any costly mistakes. To add to the equation, I have had a windfall of around $30,000 which has not been commited anywhere yet. Obviously I could put it staight into my plan to reduce the aforementioned %'s, but I don't see this as an advantage as I could qualify for the loans without it. The other option is for the second IP to be set up as an offset P&I loan (putting the 30 grand in as offset). We would concentrate all cash flow in to this account, letting it grow for future IP's. The first IP will have an IO loan.
That is my plan at this stage. This will be, hopefully, put into place early next year. Any comments or life experience with this plan, or similar, would be appreciated. Also any suggestions of better approach. As I said, I want to get it right the first time, so let me have it!!!!!