Hi Folks, I'm hoping to get some clarification, a quick sanity check maybe, and hope that posting this here might help others in a similar boat too...
My wife and I have just had our PPOR revalued and there's a reasonable chunk of equity there (the valuation is at the higher end of what we expected). We currently have an offset account with Adelaide Bank but I continually hear that a LOC is the facility investors go for, so figure we're changing mortgage product AND our lender (because the high valuation will be honoured by a different bank, ANZ).
We're also looking to setup a Hybrid Trust based on advice from a few sources (though reading threads on here about possible changes makes me wonder if it's the right choice now...)
We intend for the equity to be partially used for debt consolidation and personal expenses, but we're reserving a large portion to get an IP in the next few months. I'm in the process of setting up wills, life insurance, income protection and have met with an accountant, Nancy Keep, who I am comfortable with.
So... with the reading I've done, seminars I've attended and people I've spoken to, I still find I have a lot of questions. I know I'll learn as I go, can get answers from my accountant, etc, but I believe that fore-warned is fore-armed... I see these forums as a resource and I'd appreciate any pointers or clarification any of you could offer on things like.......
1. My wife is on maternity leave, will be back at work part-time (3 days p/w) in July - we're normally on comparable incomes but obviously she'll be down 2 days pay p/w - is there any general considerations I can use to establish whether it's better to have the new loan on our PPOR being in my name, hers, or both..?
2. I understand that having IP-related in/outgoings in an isolated account is best (essential maybe?), but is this really a big deal for our PPOR loan? ie: I would establish a new loan account for our first IP and would fund the deposit etc from our PPOR loan - I expect this transfer and any others would be easy enough to highlight come tax time. I guess I need to know whether it's necessary to have the split accounts facility when we refinance shortly - it may affect the product we go for...
3. I believe in delayed gratification, but some things we like sooner rather than later,.. some things we NEED sooner rather than later. With this in mind, is it easy enough to get money from any IP-specific account (be it a split account on our PPOR or under the name of the company/trust) and 'pay' it to ourselves personally? I'm sure this is workable, but does this create issues anywhere?
4. One of the strategies I understand is covering any shortfall of a -ve geared IP with the LOC but is there any particular structure that needs to be in place to facilitate this? Is it just a matter of having that IP-specific account split from the personal account?
Sorry for the huge post but I'd appreciate any feedback or queries to get me thinking. I have and will continue to scour the forums too...
Cheers,
Drew
My wife and I have just had our PPOR revalued and there's a reasonable chunk of equity there (the valuation is at the higher end of what we expected). We currently have an offset account with Adelaide Bank but I continually hear that a LOC is the facility investors go for, so figure we're changing mortgage product AND our lender (because the high valuation will be honoured by a different bank, ANZ).
We're also looking to setup a Hybrid Trust based on advice from a few sources (though reading threads on here about possible changes makes me wonder if it's the right choice now...)
We intend for the equity to be partially used for debt consolidation and personal expenses, but we're reserving a large portion to get an IP in the next few months. I'm in the process of setting up wills, life insurance, income protection and have met with an accountant, Nancy Keep, who I am comfortable with.
So... with the reading I've done, seminars I've attended and people I've spoken to, I still find I have a lot of questions. I know I'll learn as I go, can get answers from my accountant, etc, but I believe that fore-warned is fore-armed... I see these forums as a resource and I'd appreciate any pointers or clarification any of you could offer on things like.......
1. My wife is on maternity leave, will be back at work part-time (3 days p/w) in July - we're normally on comparable incomes but obviously she'll be down 2 days pay p/w - is there any general considerations I can use to establish whether it's better to have the new loan on our PPOR being in my name, hers, or both..?
2. I understand that having IP-related in/outgoings in an isolated account is best (essential maybe?), but is this really a big deal for our PPOR loan? ie: I would establish a new loan account for our first IP and would fund the deposit etc from our PPOR loan - I expect this transfer and any others would be easy enough to highlight come tax time. I guess I need to know whether it's necessary to have the split accounts facility when we refinance shortly - it may affect the product we go for...
3. I believe in delayed gratification, but some things we like sooner rather than later,.. some things we NEED sooner rather than later. With this in mind, is it easy enough to get money from any IP-specific account (be it a split account on our PPOR or under the name of the company/trust) and 'pay' it to ourselves personally? I'm sure this is workable, but does this create issues anywhere?
4. One of the strategies I understand is covering any shortfall of a -ve geared IP with the LOC but is there any particular structure that needs to be in place to facilitate this? Is it just a matter of having that IP-specific account split from the personal account?
Sorry for the huge post but I'd appreciate any feedback or queries to get me thinking. I have and will continue to scour the forums too...
Cheers,
Drew