Hi All,
I've been reading this forum for some time but haven't seen a discussion on this topic. I've been pondering what the optimum solution for this situation is:
Someone has the following:
2 fully leveraged IP's..
$800k in shares after CGT is paid.
If they are ready to sell the share holding in a few years, and invest all property, which is the best option:
1. Buy a PPOR for $800k cash, live in it and then borrow 6x$100k lines of credit to buy 6 investment properties worth $500k each. OR
2. Buy 8 IP's with $100k deposit and $400k loans each, while living in rental accommodation.
Details:
-Rented accomodation would be to the same standard as the potential PPOR, this is in Sydney
-IP's could be in any capital city
I thought it would be better to buy a PPOR for cash (or pay one off), then borrow deposits as LOC's against that (tax deductible), then buy IP's because eventually the IP's would grow and allow refinance to free up the PPOR again.
Also there would be no rent to pay because living in PPOR - thus helping with the cashflow.
The downside I saw is 2 less IP's - that is 1 less property when including the PPOR. The PPOR should be as good as an IP because it is still owned and the growth is still achieved.
Please - no advise about avoiding property though! This is a hypothetical situation and something based upon a future date.
Dan
I've been reading this forum for some time but haven't seen a discussion on this topic. I've been pondering what the optimum solution for this situation is:
Someone has the following:
2 fully leveraged IP's..
$800k in shares after CGT is paid.
If they are ready to sell the share holding in a few years, and invest all property, which is the best option:
1. Buy a PPOR for $800k cash, live in it and then borrow 6x$100k lines of credit to buy 6 investment properties worth $500k each. OR
2. Buy 8 IP's with $100k deposit and $400k loans each, while living in rental accommodation.
Details:
-Rented accomodation would be to the same standard as the potential PPOR, this is in Sydney
-IP's could be in any capital city
I thought it would be better to buy a PPOR for cash (or pay one off), then borrow deposits as LOC's against that (tax deductible), then buy IP's because eventually the IP's would grow and allow refinance to free up the PPOR again.
Also there would be no rent to pay because living in PPOR - thus helping with the cashflow.
The downside I saw is 2 less IP's - that is 1 less property when including the PPOR. The PPOR should be as good as an IP because it is still owned and the growth is still achieved.
Please - no advise about avoiding property though! This is a hypothetical situation and something based upon a future date.
Dan