your access or flexi bond , so you won ’ t pay interest on those funds while you are not using them . The difference is that those funds are accessible should you need to access them .
The funds in your access bond can be used as reserves , and if they are healthy , you can use them to :
• Subsidise shortfalls in your property portfolio ( if you have shortfalls ) or if an interest rate hike increases your shortfalls
• Expand your property portfolio and
• Have funds available for deposits , transfers fees , bond registration costs , etc ., to buy more investment properties
• Pay back some of the money you have pushed in over the years ( loan repayment that should also not incur tax implications ), and
• Distribute some funds to you if your loan accounts are settled .
In summary , here ’ s my take on whether you should pay off your properties . You can , but you don ’ t have to . There are advantages and disadvantages to paying off your properties . What is critical is ALWAYS to make sure you have healthy cash reserves in your property portfolio . As you age and your property portfolio grows , strive to increase those cash reserves . In this case , cash is still king !
About the Author
Jaco Grobbelaar is a successful property investor , structuring
specialist , international speaker and author . He founded Prosperity
Enterprises to equip individuals to build their property portfolios through education , structuring
and support .
SA Real Estate Investor Magazine NOV 2022 49