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.
Thanks TerryW for valuable advise so far.
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.
Seeking your valuable thoughts on my plan
Thanks TerryW for valuable advise so far.
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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