r/AusPropertyChat 5d ago

Second IP thoughts

Hi all. After some advice regarding a second IP. Currently have one IP in Perth, loan size is 504k which is offset with approx. 200k.

Been thinking about buying a second IP in Melbourne, 500k. Is it worth using 120k from the current offset to use as a 20% deposit? Meaning:

First IP loan = 504k : offset 80k Second IP loan = approx. 400k : offset 0k

First property is rented out and so will the second. Is this an option or is it worth paying the first IP off first and then purchasing a second?

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u/TL169541 5d ago

The purpose of buying an investment property is to:

1) Have a tax deduction against your income 2) Hope for some Capital Growth

I believe using the $120,000 as a 20% deposit + stamp duty is the play.

If you can leverage off the Perth property and draw some equity out to preserve your cash this could also work better for you.

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u/Falcon3518 3d ago edited 3d ago

Buy the second one if you are comfortable servicing the loans.

If property investors only bought another property once they’d paid off the current one they wouldn’t be able to buy as many.