Contemplating Options

I'm very new to this & would love some feedback if people are so inclined :)

I received my house valuation back today, it was slightly higher than I expected (yay!) so I have $50K to play with. Refinancing, I have been quoted 4.94% IO with 100% offset, no LMI as it will be 80% LVR. Immediate plan is to refinance & park the $50K in the offset account till I find something.

The options I'm contemplating are:
1. Move into rental property, rent out current PPOR which would be CF+, buy IP CF+
2. Stay in PPOR, buy IP CF+
3. Rent out current PPOR, buy new PPOR with the view to adding value through renovation over 1-2 years (guessing time frame here)

My medium-long term strategy is evolving but I have a renovation / development itch I really want to scratch. If I can make it happen I would dearly love to initially cut back work then quit completely & make a living through renovating / developing property. I'm obviously not there yet.

Complicating factors:
- might need to change jobs / move to Sydney in the next year. I have a contract for 12 months but if the right thing came up I would go.
- want to be in a good school zone by Jan 16 ideally we'll stay in the vicinity for a few years at least, we're currently in a shitty school zone, he will not be going to that school, I would rather not pay for private schooling till high school
- we're a single income household (

Any thoughts / ideas greatly appreciated
 
Really investigate "parking" $50k in your offset account. From what i know you could hit some ATO issues if you have any personal funds ever hit that account. in my opinion your best to leave it in your redraw until you need it. then tranfer it direct to where it needs to go i.e. a real estate trust fund etc. then the ATO can't come back at you as the flow of money never has a hint of personal use.

I stress this is my opinion but well worth looknig into or asking others.
 
I've also got alarm bells going off with the 'parking in offset account' bit. I think you need to get some advice regarding loan structuring for this.

1. Use a separate account account to access the $50k equity. Don't just increase your existing home loan.
2. Park the money in the redraw facility of that equity loan. If you must put it into an offset account, the offset account should be attached to the equity loan and the money in there should be transacted exclusively for tax deductible purposes (this would not be my preferred option as human nature tends to muck it up).

As for the rest, there's a lot of options ahead of you. You may need to get more specific advice on what is the most viable (a broker will be able to discuss the finance implications of the various options). It's very difficult to tell someone what's the best path to take without knowing what they want from life. :)
 
Back
Top