General question about paying down Ip debt

Discussion in 'Investment Strategy' started by Synergy, 24th Feb, 2020.

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  1. Synergy

    Synergy Well-Known Member

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    I am currently paying non deductible debt off first. But why do people at work pay down IP debt to get there IP to positive geared? Aren't they throwing money away or is it a good idea if you know your going to sell it in the future?
     
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Personal goals dont always align with cashlow logic.

    In addition, in recent years the spread between IO and PI has made the IO piece not that attractive for many on an in depth analysis

    ta
    rolf
     
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Perhaps due to a misunderstanding. I came across a guy that did this many years ago and his argument was that positive geared property = good and therefore he should try to make his investment property positive as soon as possible.

    But it is throwing money away really as increasing tax and non-deductible debt.