Thanks to what I have learned on the good ship Somersoft... I have taken out my first loan split and LOC. I didn't realise it was so easy to access equity. Should really have done it earlier and purchased IPs with equity, but there you go, lesson learned.
I'm starting to understand how people can just keep buying IPs after IPs if they buy well under market value and revalue within 1 year or so to extract the original deposit out (and more, hopefully). And now I understand why people say do it early... because if the market has dropped a bit it might mean that you can't get at the equity that you originally had.
Nevertheless... now I have a loan split that is enough for a IP deposit and a $40k LOC that I was intending on putting IP expenses into (everything bar interest) in order to convert my non deductible debt into tax deductible debt. Edit: by paying IP expenses from the LOC instead of from offset savings where the offset account is against the PPOR loan. However, the current state of the sharemarket has got me thinking about drip feeding it into shares or managed funds over the long term. Just curious as to what people would do with a LOC in this climate...? The risk averse part of me would just spend the LOC on IP expenses, but I am curious to know how many investors on SS use their LOC for non property related reasons.
TL;DR: what would you do with a $40k LOC?
I'm starting to understand how people can just keep buying IPs after IPs if they buy well under market value and revalue within 1 year or so to extract the original deposit out (and more, hopefully). And now I understand why people say do it early... because if the market has dropped a bit it might mean that you can't get at the equity that you originally had.
Nevertheless... now I have a loan split that is enough for a IP deposit and a $40k LOC that I was intending on putting IP expenses into (everything bar interest) in order to convert my non deductible debt into tax deductible debt. Edit: by paying IP expenses from the LOC instead of from offset savings where the offset account is against the PPOR loan. However, the current state of the sharemarket has got me thinking about drip feeding it into shares or managed funds over the long term. Just curious as to what people would do with a LOC in this climate...? The risk averse part of me would just spend the LOC on IP expenses, but I am curious to know how many investors on SS use their LOC for non property related reasons.
TL;DR: what would you do with a $40k LOC?
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