First IP, Unit or house?

If you can get an offset account set up on it. What you are doing is similar to offset but may hurt you in terms of tax deductibility in the future if you decide to turn your home into an invest (ie: if you decide to rent or upgrade)

 

Dan I would stop paying extra into your mortgage if you think that one day your PPOR might turn into an IP.....the way you are doing it is reducing the loan balance, if you used an offset account it would have the same effect in reducing interest payable, but it would not reduce the balance of the loan...maximising your deductions in future

 

And jinx to Befuddled

 

...damn it!

 

Hmmmm, thanks guys, I didn't consider that before but we will most likely turn it into an IP in 15 years or so.

 

Call up your bank and ask them to set up the offset. Since your loan is only 3months old they might do it for free.

 

Done, all set up. Auto payment changed to go to mortgage and offset .

Thanks for the advice.

 

Once you've found comparable properties of both a house or a unit, in an affordable budget bracket, compare potential return capacities that would be generated by either.

For example the rental return pa. and yearly ROI%, gearing ratio to new mortgage amount, Projected expenses, eg land tax, strata, property management fees.

Decide whether or not the higher rental return (potentially from a unit), or the faster capital growth (potentially from a House) is what would suit your cash flow projections.

Consider how long you will keep the property (short, med, long term) to realise these gains.

With cashflow in mind, you should have a clearer direction to move towards.

 

First lesson I took from this forum is get off yer bum and get stuff done, nothing comes to those who sit on the side lines waiting

 

OK, it's up to you then if you are using it as an enforced savings plan. I personally use an offset for a rainy day but yes it does require discipline not to dip into it!

Edit: ah just saw your more recent posts for some reason. All good