Hi Somersofters,
As has been noted time and again, this forum has a wealth of knowledge. I've been coming here for a few years now and have learnt an immense amount. Thank you all for your contributions.
Moving to the reason for my post: I've come to the point where my LVR against property has been 'maxed out', and thus am unable to borrow any more. My income can evidently allow me to borrow another $230k odd.
My idea: I have ~300k of shares that I own outright (thus was not included in the bank's LVR calculations). Given these are shares, I can only make out a margin loan against them (so cannot do an LOC). As such I was thinking of
1. Cashing out my 300k of shares
2. Buying a property for ~$300k (which would thus be owned outright) and renting this out and then
3. taking out an LOC of ~80% of the value of the new property (so ~$240k) and re-purchasing as many of the shares as possible that I sold in the first place.
Why?: Because it gives me another couple of hundred k of skin in the game. You all know as well as I do how powerful that can be compounded.
The issue: Doing this is going to result in a bunch of transaction costs on both selling, and repurchasing the shares. I'd also be exposed to capital gains in a couple of spots. Not to mention there is also the risk of shares rallying a lot during the whole period I am undertaking this initiative.
My question: Is there a better way for me to get the current equity I have in my shares to work for me? Is there a type of loan perhaps that will simply 'front'/re-allocate me the money in such a way that i can avoid the issues above, yet still use my share equity to get more skin in the game?
I would love to hear your thoughts.
PS: I think I'm finally getting used to the "new" look and feel of the forum.
As has been noted time and again, this forum has a wealth of knowledge. I've been coming here for a few years now and have learnt an immense amount. Thank you all for your contributions.
Moving to the reason for my post: I've come to the point where my LVR against property has been 'maxed out', and thus am unable to borrow any more. My income can evidently allow me to borrow another $230k odd.
My idea: I have ~300k of shares that I own outright (thus was not included in the bank's LVR calculations). Given these are shares, I can only make out a margin loan against them (so cannot do an LOC). As such I was thinking of
1. Cashing out my 300k of shares
2. Buying a property for ~$300k (which would thus be owned outright) and renting this out and then
3. taking out an LOC of ~80% of the value of the new property (so ~$240k) and re-purchasing as many of the shares as possible that I sold in the first place.
Why?: Because it gives me another couple of hundred k of skin in the game. You all know as well as I do how powerful that can be compounded.
The issue: Doing this is going to result in a bunch of transaction costs on both selling, and repurchasing the shares. I'd also be exposed to capital gains in a couple of spots. Not to mention there is also the risk of shares rallying a lot during the whole period I am undertaking this initiative.
My question: Is there a better way for me to get the current equity I have in my shares to work for me? Is there a type of loan perhaps that will simply 'front'/re-allocate me the money in such a way that i can avoid the issues above, yet still use my share equity to get more skin in the game?
I would love to hear your thoughts.
PS: I think I'm finally getting used to the "new" look and feel of the forum.