Forums / Property Investing / General Property / Home loan that wont go away

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  • Profile photo of gary.bowler20923gary.bowler20923
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    @gary.bowler20923
    Join Date: 2003
    Post Count: 2
    Profile photo of FFCommFFComm
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    @ffcomm
    Join Date: 2004
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    While it can be bad if all your rentals go empty there are strategies for avoiding such a risk. The first is if you have a lot of properties then you will probably find that a % will always be rented, the second one is to buy cheaper properties as then you can afford the repayments if it does go vacant for a period of time. Alswo you can carry insurance whcih can cover vacancy (dependant on certain circumstances).

    All in all I see rental income as being better than employment income, as at the very least if you can let the property out, you can always reduce the rent, so you can always get some $$$ for your property (at the very least).

    I think your idea of using the money ($80K) to put into an offset account is excllent! What you can do is buy $100K house, positive gear it as fast as you can then go and then use your $80K plus your excess cashflow and add it to your next property. You could potnetially buy a CF+ property every year that provides you quite a high income! After a while you won’t even need your jobs income to reduce the loan amount!

    Of course this is simply my opinon, but I think it’s a pretty good plan!

    Rgds.
    Lucifer_au

    Profile photo of wealth4life.comwealth4life.com
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    @wealth4life.com
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    The more EQUITY the safer you will be, also equity will give you leverage for further investments … but … cashflow is king … good luck.

    You also have a wonderful family so don’t blow it, make them proud and grow that wealth then teach … Phil[biggrin]

    Profile photo of bennidobennido
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    @bennido
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    I think Lucifer’s suggestion is a very sensible one for your situation. It sets you off at a nice slow pace. One where you can learn without exposing yourself to too much risk too fast. And you can always speed up the process (i.e. more risk but potentially higher returns) when you are more confident.

    Profile photo of techatecha
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    @techa
    Join Date: 2004
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    Why couldnt the family register an $80000 caviet
    on the mortgage for security.

    You get better return and cash flow.
    Increased equity and proof of cashflow = more properties.

    Just a thought.

    Humans are the DUMBEST of creatures.
    They do the same thing day in day out and expect a DIFFERENT result.

    Profile photo of gary.bowler20923gary.bowler20923
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    @gary.bowler20923
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    Thanks for the input peoples [biggrin]

    I would kind of feel better not being in huge amounts of debt, so would you concentrate on still contributing a fair amount of your income to pay off the first loan ASAP? It’s not really a +ve flow if have to pay $$$ but it will cut down interest, after the loans paid off the total rent would be +ve minus management fee’s and repairs? This is sort of how I am thinking of traveling with my investing strategy. Try and have the first one paid off then start with the second and so on and so forth.

    Thanks again,

    Gary

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