Performance Property Data

“Money is the root of all evil, but if you haven’t got it, it’s worse.” This month on Property Insiders, David sits down with Kevin Agent from the Australian Lending and Investment Centre to chat about cash buffers. A cash buffer is an amount of money you have in a special account that is there if something happens beyond your control. Kevin tells David that there are two options for the cash buffer: to have it in a redraw account, or in an offset account. There are advantages to each, but Kevin thinks if you have a home loan, your cash is better off in a redraw account, and an offset account for an investment property. A redraw account is money you use to pay off your loan, but is then accessible should you need it later on. An offset account is essentially a savings account where the balance is subtracted from your total loan amount, thus reducing your interest. Kevin says his preference is always for an offset account, but for those who are not as good with saving money, a redraw may be a better option as