Factors to consider when renting room by room
Even though it can be a profitable approach, it doesn’t come without risks. Although renting out individual rooms may result in extra income, it is more likely that problems will arise if there are a number of unrelated tenants living together and this could affect the cash flow.
Why you should consider using an offset account
An offset account helps you save interest on your home loan without having to pay the fund into the actual loan. The offset account is separate to the loan, but still linked so you are able to hold your money there to save on interest, but you can still withdraw the money if you need it for other expenses. For example, if you have a $400,000 home loan and you deposit $50,000 into the offset account, then these funds will reduce the loan amount chargeable by interest to $350,000. If you chose to redraw the $50,000 later on, the balance would return to $400,000 and you will be charged interest on that amount.
