Hi All,
I'm still on L-plate with prop investment and hoping the forum experts who have made it could give me some pointers on how to achieve my goal a bit sooner.
* Goal: would like to have a passive income of $50k a year + own PPOR
* My situation:
I'm in my early 30's, have no PPOR or other non-tax deductable debts.
Salary income: 100k-120k which may drop by 30% within the next 2 years as I plan to switch to another more fulfilling job but will significantly rise again after 2 years.
I currently have:
-$1.7mil portfolio of 5IPs, slightly +ve geared at 90% LVR.
-$430K cash buffer sitting in offset, saving interest on the investment loan giving the portfolio a net cashflow of ~$30k pa after all outgoings (and a bit more after tax deductions.) The remaining loan balance is fixed for 2 years at ~5% interest rate.
-$60K Share portfolio, acquired over 5 years ago.
My strategy is to buy and hold neutrally geared established houses in capital cities. I plan to never sell and eventually live off equity if possible. Any equities I've gained has been pulled out to fund additional IP purchases.
I'm very risk averse. I know it can be a waste saving $430k in offset account as the $ value gets eroded by inflation but at this stage it gives me the comfort of having a bit of positive cash flow and the security of not having to make a forced sale if interest rate spikes beyond 7% in 2 years time. However it's there also because I have not found a more profitable way to use this funds (hence this post.)
I'm planning in a few years time perhaps to purchase a reno for PPOR (nothing fancy, just about $350k in a modest suburb) in Melbourne where I live and add value or to turn it into a cash cow. I cannot do this at the moment due to personal circumstances. However I can save about $50k+ a year.
I would like to reach my goal, without relying on the $430k sitting in the offset account to reduce interest cost. This saving is planned for PPOR in the near future or to fund other investments etc.
My banker says I can continue acquiring more IPs as long as they are neutrally geared and I can fund the deposit. This is not too hard with the current low interest rate however I'm already heavily geared at 90% LVR and looking at the repayment figures I do have a bit of fear creeping up if interest rate rises above 7%.
Happy to hear any suggestions.
I'm still on L-plate with prop investment and hoping the forum experts who have made it could give me some pointers on how to achieve my goal a bit sooner.
* Goal: would like to have a passive income of $50k a year + own PPOR
* My situation:
I'm in my early 30's, have no PPOR or other non-tax deductable debts.
Salary income: 100k-120k which may drop by 30% within the next 2 years as I plan to switch to another more fulfilling job but will significantly rise again after 2 years.
I currently have:
-$1.7mil portfolio of 5IPs, slightly +ve geared at 90% LVR.
-$430K cash buffer sitting in offset, saving interest on the investment loan giving the portfolio a net cashflow of ~$30k pa after all outgoings (and a bit more after tax deductions.) The remaining loan balance is fixed for 2 years at ~5% interest rate.
-$60K Share portfolio, acquired over 5 years ago.
My strategy is to buy and hold neutrally geared established houses in capital cities. I plan to never sell and eventually live off equity if possible. Any equities I've gained has been pulled out to fund additional IP purchases.
I'm very risk averse. I know it can be a waste saving $430k in offset account as the $ value gets eroded by inflation but at this stage it gives me the comfort of having a bit of positive cash flow and the security of not having to make a forced sale if interest rate spikes beyond 7% in 2 years time. However it's there also because I have not found a more profitable way to use this funds (hence this post.)
I'm planning in a few years time perhaps to purchase a reno for PPOR (nothing fancy, just about $350k in a modest suburb) in Melbourne where I live and add value or to turn it into a cash cow. I cannot do this at the moment due to personal circumstances. However I can save about $50k+ a year.
I would like to reach my goal, without relying on the $430k sitting in the offset account to reduce interest cost. This saving is planned for PPOR in the near future or to fund other investments etc.
My banker says I can continue acquiring more IPs as long as they are neutrally geared and I can fund the deposit. This is not too hard with the current low interest rate however I'm already heavily geared at 90% LVR and looking at the repayment figures I do have a bit of fear creeping up if interest rate rises above 7%.
Happy to hear any suggestions.
Last edited: