Hi,
I am considering refinancing an existing IP (IP1) into a LOC loan to use the available equity to finance maintenance/repairs and future IP purchases.
The reasons I am investigating this structure are :-
1. To use the banks money rather than my own money to finance IP/Investment related costs.
2. It will also serve to keep my Investment finances in one working account. Rent from all IP's could be paid into this account & Interest from all IP's could be debited from this account
3. To have funds readily available to pay for 'emergency repairs' such as water heaters etc...
4. It is a good time to revalue the IP while the market is high.
I intend to put all of my pay into a 100% offset account linked with IP2 (when the PPOR is paid off). This offset account will serve as my 'personal working account' and help reduce the interest payable on IP2.
I am aware that I can claim all of the interest on the LOC loan if it is used for 'investment related purposes' but would it cause complications with my Tax return ?.
Does anybody arrange their finances like this or similar to this ?.
Are the high fees & charges associated with LOC's to much to pay for the flexibility/available cash for repairs/maintenance ?
Are there any gaping holes with this financing arrangement ?
Any comments would be greatly appreciated.
I am considering refinancing an existing IP (IP1) into a LOC loan to use the available equity to finance maintenance/repairs and future IP purchases.
The reasons I am investigating this structure are :-
1. To use the banks money rather than my own money to finance IP/Investment related costs.
2. It will also serve to keep my Investment finances in one working account. Rent from all IP's could be paid into this account & Interest from all IP's could be debited from this account
3. To have funds readily available to pay for 'emergency repairs' such as water heaters etc...
4. It is a good time to revalue the IP while the market is high.
I intend to put all of my pay into a 100% offset account linked with IP2 (when the PPOR is paid off). This offset account will serve as my 'personal working account' and help reduce the interest payable on IP2.
I am aware that I can claim all of the interest on the LOC loan if it is used for 'investment related purposes' but would it cause complications with my Tax return ?.
Does anybody arrange their finances like this or similar to this ?.
Are the high fees & charges associated with LOC's to much to pay for the flexibility/available cash for repairs/maintenance ?
Are there any gaping holes with this financing arrangement ?
Any comments would be greatly appreciated.