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To reinvest or pay down

Discussion in 'Managed Funds & Index Funds' started by islandgirl, 9th Jul, 2008.

  1. islandgirl

    islandgirl Well-Known Member

    Joined:
    18th Sep, 2006
    Posts:
    118
    Location:
    Middle of beautiful Moreton Bay, Qld
    I'm in a bit of a quandry at the moment trying to decide the best course of action and need opinions of those with a clearer head than mine.

    Basically my funds had a nett return of just over 10% (income less margin loan) this year which has fully funded the interest on my IP. (in fact I have a cash surplus of above $2000 My investment property has increases in value by approximately the same amount my funds have decreased by. Basically my world is in balance :rolleyes: I suppose when I think of it after the disasterous couple of months in the market to be no worse off that when I started this a year ago is not too bad.

    Now I have approximately $10K in cash and I'm not sure whether it is better to buy more Navra now or pay down my margin loan in the short term. My LVR started quite reasonable at 50% and now with the drop in the market I am up to almost margin call level so I have to begin reducing it NOW. I'd like to increase cash flow to be able to add an addtional property very soon but if the market is going to drop in the short term maybe its better to pay down debt....Help
     
  2. clayton4115

    clayton4115 Member

    Joined:
    20th Sep, 2007
    Posts:
    11
    Location:
    brisbane
    i would definately put it in your margin loan and reduce the margin loan debt, i think things are only going to get worse!
     
  3. Redwing

    Redwing Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    476
    Location:
    PERTH..WA
    Yep, Bears have gone wild...

    I'm expecting further Southward movement unless some Good News Bear pokes his head out of the cave :(
     
  4. Sacko

    Sacko Well-Known Member

    Joined:
    20th Aug, 2007
    Posts:
    69
    Location:
    Central Coast, NSW
    Can't you pay down the margin loan for now and redraw when needed for additional property once the market has stablised?