I'm about to come into some money, about a $130k worth from a sale of a property currently occupied by my father. The house is on the market, and there's a lot of interest so we are certain it'll sell.
I've always wanted to buy a little house or a nice unit for myself to live in, and I expect to get one using about 110k, and a mortgage for approximately 110k- leaving me with good equity to look at getting an investment property for around 190k. The one I'm looking at has a yield of about 7%, and I can afford to easily cover the rates and insurance etc. it's already tenanted so I don't have to find any, and that would cover the mortgage on it, and I'll fix the loan to make sure interest rate fluctuations won't effect me.
The question is, should I? I would need to reduce my personal loan repayments a little to do so- but it would still be above the minimum repayments easily, and I'm expecting to receive a few bonuses next year which I can use to pay down my own loan.
And if I should, should I set up a trust or a company to do it, reducing my taxes etc?
I'm in Christchurch, New Zealand. Thanks :-)
Edit: alternatively, I could wait and have high repayments on my home loan. OR I could use less deposit, higher borrowing, and just sink that money into my managed fund currently earning more than interest rates (rates around 6% but soon to rise to about 7% expected) at about 8.92%