Hey all, New reader of the forum, new member and keen to invest.
I have yet to find an answer to this, so i thought id chuck it in here too see peoples views.
Say you have a PPOR that you bought (took out a loan) for $300 000. And whether it be by sheer luck or waiting 10-20 or so years, your property has risen in value to $600 000.
would it a) be better to use the equity to take out another loan for an IP or 2.
or b) Sell the house, and pay off the remainder of the loan. Say for example it was 10 years, and you had 200 000 still owing, you would have 400 000 in cash. Would it be better then to say buy a 200 000 PPOR outright, and then i could spend more of my income in IP's ratherr than the PPOR loan repayment? or even buy a 200 000 PPOR, and a 200 000 IP outright, then i could buy in say an area with a higher captial gain potential and lower rental yeild, but because it is paid outright the lower rent will not matter as much as it would be pure income, without repayments to make.
From what i am currently b) would set myself up better as i would have little to no debt but still have property. I think it would be a good start to not have any debt, and start investing, that way any negative cashflow for IP's would not really effect my income as much as a loan for a PPOR.
Hypothetical question 2: I am currently about to join the Air Force; where i will be living on base and not having any formal PPOR to worry about for the time being. While im young (currently just turned 19) and have a fair bit of disposable income buy an IP after saving the deposit (in reality maybe 2-3 years of saving) whilst living on base, i wont have the advantage of first home buyers grant but whilst living on base having an IP would be an advantage i would think. would there be any real disadvantage to this? it would enable be to start investing younger and build a better portfolio but what is your view?
What do you guys think, sorry about the novel of a post but i look forward to your answers and views
I have yet to find an answer to this, so i thought id chuck it in here too see peoples views.
Say you have a PPOR that you bought (took out a loan) for $300 000. And whether it be by sheer luck or waiting 10-20 or so years, your property has risen in value to $600 000.
would it a) be better to use the equity to take out another loan for an IP or 2.
or b) Sell the house, and pay off the remainder of the loan. Say for example it was 10 years, and you had 200 000 still owing, you would have 400 000 in cash. Would it be better then to say buy a 200 000 PPOR outright, and then i could spend more of my income in IP's ratherr than the PPOR loan repayment? or even buy a 200 000 PPOR, and a 200 000 IP outright, then i could buy in say an area with a higher captial gain potential and lower rental yeild, but because it is paid outright the lower rent will not matter as much as it would be pure income, without repayments to make.
From what i am currently b) would set myself up better as i would have little to no debt but still have property. I think it would be a good start to not have any debt, and start investing, that way any negative cashflow for IP's would not really effect my income as much as a loan for a PPOR.
Hypothetical question 2: I am currently about to join the Air Force; where i will be living on base and not having any formal PPOR to worry about for the time being. While im young (currently just turned 19) and have a fair bit of disposable income buy an IP after saving the deposit (in reality maybe 2-3 years of saving) whilst living on base, i wont have the advantage of first home buyers grant but whilst living on base having an IP would be an advantage i would think. would there be any real disadvantage to this? it would enable be to start investing younger and build a better portfolio but what is your view?
What do you guys think, sorry about the novel of a post but i look forward to your answers and views