I would appreciate some advice from investors. I have 7 IP's valued at
$3.1M with debt of $2.1M. I am renting here in Sydney and would eventually like to shift into one of the properties. Due to health issues I have been made redundant and receive a redundancy pension of $6K (net) per month. The rental income from the IP's is approximately $8 per month (also net) giving me a total income of $14K per month. However, the mortgages are collectively $10K per month.
I have $1M in super which I can draw down on as an allocated pension. I also have $200K in cash savings.
I have been toying with the idea of structuring my cashflow as follows:
Monthly income
$6K pension
$8K rental income
$6K allocated pension from super fund
Monthly Liabilities
$10K IP Mortgages
This will give me $10K per month to live off and $200K as a cash buffer. My question is if I wish to shift into one of the IP's would I be better off drawing down $600K from the super fund (tax free in 18 months when aged 60) and paying off the house or keep drawing down an allocated pension. Due to assets and income I won't receive the old aged pension, so this is it.
My own personal views are that if I keep drawing down an allocated pension when I shift into the IP then I can adjust the drawdown amount up to 10percent. If the average balanced sharemarket return has been 7 percent then I would only eat into the $1M capital at 3 percent per year. In 20 or so years when the $1M runs out I can then draw down against one of the other IPs and pay off my then PPOR (if the bank lends it).
Thanks
$3.1M with debt of $2.1M. I am renting here in Sydney and would eventually like to shift into one of the properties. Due to health issues I have been made redundant and receive a redundancy pension of $6K (net) per month. The rental income from the IP's is approximately $8 per month (also net) giving me a total income of $14K per month. However, the mortgages are collectively $10K per month.
I have $1M in super which I can draw down on as an allocated pension. I also have $200K in cash savings.
I have been toying with the idea of structuring my cashflow as follows:
Monthly income
$6K pension
$8K rental income
$6K allocated pension from super fund
Monthly Liabilities
$10K IP Mortgages
This will give me $10K per month to live off and $200K as a cash buffer. My question is if I wish to shift into one of the IP's would I be better off drawing down $600K from the super fund (tax free in 18 months when aged 60) and paying off the house or keep drawing down an allocated pension. Due to assets and income I won't receive the old aged pension, so this is it.
My own personal views are that if I keep drawing down an allocated pension when I shift into the IP then I can adjust the drawdown amount up to 10percent. If the average balanced sharemarket return has been 7 percent then I would only eat into the $1M capital at 3 percent per year. In 20 or so years when the $1M runs out I can then draw down against one of the other IPs and pay off my then PPOR (if the bank lends it).
Thanks