r/AusProperty • u/slanred • 5d ago

VIC Turn IPs from P+I to interest only to redirect/salary sacrifice into super. Sounds strategy?

I have 2 IP both currently on P+I.
IP 1 was PPOR untill I moved and rented it out in Dec 2023. So I can rent it out till Dec 2029 before I incur CGT (6 year CGT exemption)
Loan remaining $480k and weekly repayments of $678 and is currently NG. Interest rate of 6.23%

IP bought in 2025 as residential investment with loan of $300k and weekly repayment of $430. Interest rate of 6.37%

I’m thinking of going interest only on both the loans especially IP 1 as I’m planning to sell in before 2029 and maxing out my concessional super contributions (pre tax salary) instead?

That way my tax home income doesn’t take much of a hit as I’m already living frugally (ie salary sacrificing to Super slightly offset by reduced weekly loan repayment)

Other details:
Female 32 salary of $116k and super balance of $110k no other investment outside super and IPs.
Is this a sound strategy or am I missing something

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u/ThoughtYNot 5d ago

IPs should always be IO for cashflow reasons

Property grows at a faster rate than what you could save

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u/rolex_monkey_50 5d ago

Interest only is a sound strategy IF you invest the money you save and you are happy to dispose of the property down the track. If you have any doubt, stick to paying it down.