I have spent last few days in here to come up with right solution for IP finance strategy. Please advise if you think i am missing anything or misunderstood anything or whether this will work Aus Tax law.
Current Situation:
PPOR - Equity 300 K. I have I/O only loan with Offset acc 260 K saving.
Plan for 1st IP:
1 Loan IO loan on 80% against IP 1.
1 LOC against PPOR to cover 20 % IP 1 and associated buying Cost.
2nd LOC against PPOR to cover IP 1 on going cost like maintenance and interest payment to 80% IP LOC, etc.
Rent/income from IP 1 will get deposited to PPOR offset acc. Offset will service IO PPOR loan and 2nd LOC against PPOR IO loan payment.
Plan for 2nd IP:
1 Loan IO loan on 80% against IP 2.
1 LOC against PPOR to cover 20 % IP 2 and associated buying Cost.
2nd LOC against PPOR to cover IP 2 on going cost like maintenance and interest payment to 80% IP LOC, etc.
Rent/income from IP 2 will get deposited to PPOR offset acc. Offset will service IO PPOR loan and 2nd LOC against PPOR IO loan payment.
Current Situation:
PPOR - Equity 300 K. I have I/O only loan with Offset acc 260 K saving.
Plan for 1st IP:
1 Loan IO loan on 80% against IP 1.
1 LOC against PPOR to cover 20 % IP 1 and associated buying Cost.
2nd LOC against PPOR to cover IP 1 on going cost like maintenance and interest payment to 80% IP LOC, etc.
Rent/income from IP 1 will get deposited to PPOR offset acc. Offset will service IO PPOR loan and 2nd LOC against PPOR IO loan payment.
Plan for 2nd IP:
1 Loan IO loan on 80% against IP 2.
1 LOC against PPOR to cover 20 % IP 2 and associated buying Cost.
2nd LOC against PPOR to cover IP 2 on going cost like maintenance and interest payment to 80% IP LOC, etc.
Rent/income from IP 2 will get deposited to PPOR offset acc. Offset will service IO PPOR loan and 2nd LOC against PPOR IO loan payment.
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