Hello all,
Seeking your learned advice/thoughts on an upcoming scenario.
My husband and I own three IPs in a hybrid discretionary trust.
The discretionary feature is one of the main reasons we chose to buy in a trust. But this only comes into play when there is no debt remaining on the properties inside the trust.
On each property, there's a debt of approx $120K remaining.
Early next year, we will be selling our current PPOR. We will walk away with about $850K. We're moving to a more expensive area, and will buy a new PPOR worth about $1 million.
We have one child, age 18, not working.
The advice I am seeking regards the best use of our PPOR proceeds.
I am wondering if it is best to use 100% of that money as the deposit on our new PPOR, and just continue as we currently are, nibbling away at the IP loans.
OR
While we have some unlocked cash, is it better to pay out the loans on the three IPs? And distribute the income from the trust to our non-working son? (He will be earning little or no income for the next three to five years, while at uni.) This would mean a bigger loan on our PPOR, however.
What are your thoughts on this scenario? It will be a loooong time before we have access to this much unlocked cash again, and I want to use it in the most effective eay possible.
Cheers.
Seeking your learned advice/thoughts on an upcoming scenario.
My husband and I own three IPs in a hybrid discretionary trust.
The discretionary feature is one of the main reasons we chose to buy in a trust. But this only comes into play when there is no debt remaining on the properties inside the trust.
On each property, there's a debt of approx $120K remaining.
Early next year, we will be selling our current PPOR. We will walk away with about $850K. We're moving to a more expensive area, and will buy a new PPOR worth about $1 million.
We have one child, age 18, not working.
The advice I am seeking regards the best use of our PPOR proceeds.
I am wondering if it is best to use 100% of that money as the deposit on our new PPOR, and just continue as we currently are, nibbling away at the IP loans.
OR
While we have some unlocked cash, is it better to pay out the loans on the three IPs? And distribute the income from the trust to our non-working son? (He will be earning little or no income for the next three to five years, while at uni.) This would mean a bigger loan on our PPOR, however.
What are your thoughts on this scenario? It will be a loooong time before we have access to this much unlocked cash again, and I want to use it in the most effective eay possible.
Cheers.