Offset Account Query

From: Andrew G


Hi folks,

Most of you in this forum seems to agree that I/O loans with offset accounts are a good idea. My query is, if you purchase an IP, you will get two accounts from the bank. The first is the loan itself showing the negative balance owing, and the second is the offset account which would start at $0 until you dump funds into it.

What happens when you buy another IP? You will have another "loan account" showing its negative balance accordingly, but can you use the same offset account for this second IP???

Also, do you guys recommend putting a small deposit to an IP so that the rent you get back covers the loan in full, or leave a gap and pay yourself from time to time to top up your holding account?

Thanks,
Andrew.
 
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Reply: 1
From: Glenn Mott


From: "Andrew G" <andy@aandr.com.au>

Hi folks,

Most of you in this forum seems to agree that I/O loans with offset
accounts are a good idea. My query is, if you purchase an IP, you will
get two accounts from the bank. The first is the loan itself showing the
negative balance owing, and the second is the offset account which would
start at $0 until you dump funds into it.

What happens when you buy another IP? You will have another "loan
account" showing its negative balance accordingly, but can you use the
same offset account for this second IP???

>> The money in the offset account can be offset only against one
loan...which ever one you choose.


Also, do you guys recommend putting a small deposit to an IP so that the
rent you get back covers the loan in full, or leave a gap and pay
yourself from time to time to top up your holding account?

>> This is up to you really...keep the cash you would normally put up as
deposit for future purchases, or...put down the deposit to reduce the
amount you pay in interest.

Thanks,
Andrew.



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Reply: 2
From: Rolf Latham


Hiya

Depending on the lender you can have an offset acct per loan. Bit of a wasted excercise though usually because you should be concentrating all your positive cashflow into the one account. If you dilute it over two or several accounts then fees MAY overcome you, but more importantly you would find complicatons that are not needed.

Ta

Rolf
 
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