Hi Glammm,
Try the search button here on SS. for offset accounts there are several posts on the topic.
Try the search button here on SS. for offset accounts there are several posts on the topic.
IP Strategy Advice
- Thread starter Glam888
- Start date
If that were my portfolio, I'd be keeping the ppor, offloading the $800k i.p. and using the $500 odd equity as deposits on 5 i.p. But I"M NOT you! So do loads of homework/research and then ask loads of questions about your findings. Welcome to S.S. by the way.
If I was in your position Glam, I wouldn't be selling the PPOR either (assuming that's where you plan to stay forever?). You can leverage against it easily enough, so not really an issue. Plus don't know about you, but renting isn't always an option for your PPOR as easy as it is for people to say here. For me, LL's wouldn't like the look of us as tenants, plus a quick search just now on REA.com of the area we plan to build our PPOR in resulted in not even 1 house like what we want. So I understand your desire to keep it.
I would however do as the other posters have said and crank it up a notch. I'm still young and quite happy to take on more risk with higher LVR etc so in your situation I'd crank it up to an 80% LVR overall. Bare in mind this is because of my personal situation - would depend on your own situation ie. age, income size/growth/safety etc.
I would however do as the other posters have said and crank it up a notch. I'm still young and quite happy to take on more risk with higher LVR etc so in your situation I'd crank it up to an 80% LVR overall. Bare in mind this is because of my personal situation - would depend on your own situation ie. age, income size/growth/safety etc.
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I like living in a nice house too. If I suggested to my wife that we sell ours and move into a rented house .... well she wouldn't agree .
This hasn't stopped us achieving our goals. In fact changing our PPOR and the associated Tax free capital gain we've made when we've built and sold PPOR's has made us more money that all of the IP's we've had....
Ours is fully paid off in terms of non deductable loans . We have a LOC on ours to 80% of it's valuation which we've used previously to fund deposits for IP's and more recently to buy an IP outright , so we could move quickly in terms of buying a bargain.
Having a nice PPOR and changing , building / renovating that is a perfectly valid investment strategy.
Because people live in their PPOR they often make a better choice in property selection than with their IP's.
Cliff
This hasn't stopped us achieving our goals. In fact changing our PPOR and the associated Tax free capital gain we've made when we've built and sold PPOR's has made us more money that all of the IP's we've had....
Ours is fully paid off in terms of non deductable loans . We have a LOC on ours to 80% of it's valuation which we've used previously to fund deposits for IP's and more recently to buy an IP outright , so we could move quickly in terms of buying a bargain.
Having a nice PPOR and changing , building / renovating that is a perfectly valid investment strategy.
Because people live in their PPOR they often make a better choice in property selection than with their IP's.
Cliff
LOL Steve! What do you look like?
Happy to be useful Glamm
Dreadlocks down to my waist, big beer gut, total body tattoo's, don't usually wear a top, special occasion I might put thongs on, swear constantly, and have big issues with any authroity types including landlords! They also seem to be put off by my shotgun collection??
Simply by raising the LVR's up to 80% you will be able to raise $710k with no selling or other associated expenses(CGT). Why would you sell?
Propertunity said:
Would achieve the same investment profile but no buffer. Cut down the purchases and still have a buffer.
Personally in this market why would you want to invest so heavily, there is plenty of time and I would look for value add opportunities to build equity or extra income to ensure future equity.
These are the type of opportunities we are currently investigating for my son to buy as a PPOR so that we avoid CGT and also land tax.
Cheers
With that kind of equity there's a lot you can do, the right decision will depend on how aggressive you want to be.
You can get access to that equity at 80%, use this as cash deposits for other properties also at 80%. These days the rents will cover the loans and with the right structures everything will be fully tax deductable.
If you're more conservative you could leverage to 60% and purchase more at 60%. In this scenario rents will almost certainly be putting money in your pocket. With LVRs like this, banks will never give you any problems either, they'll all want to do business. The downside is that you'd only be able to purchase half as much as the previous scenario.
I think the best decision will also depend on the personal circumstances such as stability of employment, being able to prove income etc. There's lots of ways to work within this example, but there's no absolutely right answer.
You can get access to that equity at 80%, use this as cash deposits for other properties also at 80%. These days the rents will cover the loans and with the right structures everything will be fully tax deductable.
If you're more conservative you could leverage to 60% and purchase more at 60%. In this scenario rents will almost certainly be putting money in your pocket. With LVRs like this, banks will never give you any problems either, they'll all want to do business. The downside is that you'd only be able to purchase half as much as the previous scenario.
I think the best decision will also depend on the personal circumstances such as stability of employment, being able to prove income etc. There's lots of ways to work within this example, but there's no absolutely right answer.
Good on you Glam,
Looks like you got all the advice you need above. Forget a FP, get a broker and keep it conservative. I wouldn't recommend buying houses like shoes until you understand how it all works and realise the amount of paperwork and work involved in managing a portfolio.
I wouldn't sell your PPOR either.
One step at a time and build with knowledge.
regards JO
