Dear all,
I am a first time poster seeking for investment advice.
I am currently renting at the moment and I own an IP in Brisbane. The IP was purchased back in mid 2013 at $380K. Current value of the IP unknown and I still owe $370K. The loan structure of this IP is interest only with 100% offset. I currently have $30K in this offset account. This IP is negatively geared but become cash flow positive after tax benefits.
My goal within the next 3 years is to own another IP of around $450K (5% deposit with LMI inclusive) and also a PPOR.
My parents will be giving me $25K in early 2015 to use towards either the 2nd IP or PPOR.
I would like advice from you guys to make sure all money is used wisely with maximised tax benefits. Here's my questions:-
1. My preference is to obtain the 2nd IP before getting a PPOR. Is this strategically correct keeping in mind of the 3 years' time frame? Would the bank refuse to lend me money for the PPOR knowing I have 2 IP worth of debts?
2. Should I ask the bank to give me a valuation on my current IP? If the value has increased, should I use the equity as the purchasing cost for the 2nd IP? I believe the current value of my IP is no more than $410K. Also, is there a minimal increase in equity before the bank would consider refinancing the equity?
3. The bank I am using now gave me a pre-approval for up to $520K towards my 2nd IP, and told me I could have a little bit more than $600K if I cancel my current credit card. I haven't check what other banks can offer, but is it wiser to use the same bank or different one?
4. Anything else you can think of that I should do to achieve my goal?
Thanks guys and happy new year
Kingsley
I am a first time poster seeking for investment advice.
I am currently renting at the moment and I own an IP in Brisbane. The IP was purchased back in mid 2013 at $380K. Current value of the IP unknown and I still owe $370K. The loan structure of this IP is interest only with 100% offset. I currently have $30K in this offset account. This IP is negatively geared but become cash flow positive after tax benefits.
My goal within the next 3 years is to own another IP of around $450K (5% deposit with LMI inclusive) and also a PPOR.
My parents will be giving me $25K in early 2015 to use towards either the 2nd IP or PPOR.
I would like advice from you guys to make sure all money is used wisely with maximised tax benefits. Here's my questions:-
1. My preference is to obtain the 2nd IP before getting a PPOR. Is this strategically correct keeping in mind of the 3 years' time frame? Would the bank refuse to lend me money for the PPOR knowing I have 2 IP worth of debts?
2. Should I ask the bank to give me a valuation on my current IP? If the value has increased, should I use the equity as the purchasing cost for the 2nd IP? I believe the current value of my IP is no more than $410K. Also, is there a minimal increase in equity before the bank would consider refinancing the equity?
3. The bank I am using now gave me a pre-approval for up to $520K towards my 2nd IP, and told me I could have a little bit more than $600K if I cancel my current credit card. I haven't check what other banks can offer, but is it wiser to use the same bank or different one?
4. Anything else you can think of that I should do to achieve my goal?
Thanks guys and happy new year
Kingsley