New Member - Increase Repayments to Home Loan or Buy Another IP

[mdv2008]

Hi Everyone,
I have been reading the discussions on this forum, for few months now. So decided to put my question to experienced people.
I purchased my own home 3 years ago and one IP last year, in Mellbourne. Now I can afford one more IP (upto $1000 out of pocket). But my confusion is whether I should increase my loan installment to pay my home loan faster or buy second IP. I still have home loan of around 400K. Please advise.

Thanks,
MDV

 

[PrimeCommercial]

I'm not sure what you should do, but there are a lot of people around here, me included that would not increase they're ppor repayment but maybe stick the extra cash in an offset account and wait for a bargain to come up.

 

[long88]

Me too, but when & where is the bargain ? never saw it. all yields are 3% or 4%, and not good enough.

 

[mdv2008]

Thanks for the response,
I am thinking to see some financial advisors before deciding anything.

MDV

 

[Peter_Tersteeg]

Without REALLY understanding your personal circumstances, there's no way anyone can give you advice on this. Seeing a financial advisor is the only 'legally correct' advice on this anyone can give you at this point.

Keep in mind many financial advisors will probably tell you to put the money into super or managed funds as this is how many of them make their money. Most won't suggest a property related strategy at all.

If you like, I can PM you an advisor I know who is open to keeping property within your portfolio - he's one of the few I trust to get honest and unbiased advice (I don't have his number at home).

 

[BV]

MDV

What Shady said is done by many here
Just in case one day we decide to turn our own home to an investment property.

Some of us are not doing this and they are paying down their loan.
That's ok as well because by having a smaller loan you can later borrow against that property and use the new funds as a deposit for an IP.

In regards to your question, and considering the banking credit issues, price of petrol, inflation + high interest rates, potential for increased unemployment etc etc I'd go for the extra repayments.

Cheers

 

[PrimeCommercial]

Me too, but when & where is the bargain ? never saw it. all yields are 3% or 4%, and not good enough.

LOL...Look just a tad harder & negotiate harder