Hi folks, I've got 100K in offset of PPOR and WAS thinking about using 30K as deposit for a granny flat which would turn a negatively geared IP by $80 per week to $80 positively geared. IP currently worth 300K. With CORONATIME happening at the moment, I've been doing a lot of thinking about how best to utilise my 100K to work for me. Option 1: Build GF July/August ready for Christmas/Jan tenancy upticks. Option 2: Don't build GF at all and utilise deposit elsewhere. (My income can cover the negative gearing until it becomes positive) Option 3: Passively invest 20K in the share market for long term growth. Option 4: Do nothing but save for a few months then look for next IP by years end (granted market turns around quickly enough)
Option 4 no doubt. Property will drop 30-40% in the next 3-6 months. Stock markets will yoyo till the virus is under control. When it stabilises it will rebound quickly for some easy profits.
sit on the 100 in offset. Its earning 4 to 5 % pre tax assuming you have work. Risk free Assuming you have non ded debt.................look at implementing an active debt recycle strategy when the equity markets find their natural floor. meanwhile, lock nut your equity, get a loan set up that allows active DR. Loans aint loans. If you are brave u can day trade and make a few bucks now or loose one's shirt ta rolf
My interest rate is now variable 2.85% on my PPOR, can you tell me how you get 4 to 5% earnings of my offset account? I am still working full time and thankfully my job is secured throughout this downturn. I think you are right, option 4 seems like the smartest option. I considered shorting stocks when this 'crash' started weeks ago. Would have made a pretty penny but I've never shorted a stock in my life alas I sat back and watched the news about traders shorting making billions, and commentators asking if this should be illegal Will get to educating myself more now and may dip my toe in with 2K to start. 'Lock nut equity' - do you mean consolidating which equities to buy when market bottoms? I don't know how Debt Recycling will work with this downturn eating up all the equity in my PPOR and 2 IP's.
Unlike NSW which has statewide legislation covering secondary buildings (granny flats), Qld is not just blanket approval if your property can accommodate a granny flat. Before offering an opinion, have you checked that your IP is in an area that allows for granny flats? (Logan??)
Because I want to purchase more properties, and don't want to tie up all my cash in the share market. I'm also a beginner with trading, so baby steps. If there are some safe blue chip high paying dividend stocks then I may consider more but with Corona I doubt dividends will be great for the foreseeable future.
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