- TakeActionMember@takeactionJoin Date: 2005Post Count: 5
Having read Steven Knights Book – 0 to 130 properties in 3.5 years
I was very surprised they accumulated so many investment properties paying Principal and Interest.I have always been advised to pay interest only to accumulate +ve cashflow Investment properties ASAP to keep up our purchasing momentum and to aim for 10% return. It is hard enough to negotiate the deals to buy at a 10% to 15%discount and to get 10% Return paying Interest only, let alone trying to pay principal as well.
Your comments please.
Is it better to reduce our purchasing rules and pay Princpal as well??PropertyGuruParticipant@propertyguruJoin Date: 2003Post Count: 1,502
Hi welcome to furum,
Yes you are right it’s hard to find 10%+ return property now a days but still you can find. I just negotiated this week one property for 15% discount so that’s very easy. I will prefer to go for Interest only loan and keep the rest of the money in off set account.
MSN ID: amitash, Yahoo Id: bornguru
NZ loan pre approval from OZ in 48 hoursToeEdgeMember@toeedgeJoin Date: 2003Post Count: 20
IMHO if you still have non-deductable debt (on a PPOR for example) go for IO on IP’s. Otherwise, go for P&I on IP’s. This is an efficient way to build equity. But I’m no expert…….DerekMember@derekJoin Date: 2004Post Count: 3,544ian_from_brisbaneMember@ian_from_brisbaneJoin Date: 2003Post Count: 97
I agree with PropertyGuru’s approach… If you work out how much the repayments would be under P&I, then every time you make an interest payment for your IO loan, put the difference into an offset account. This way it will be ‘costing’ you the same as a P&I loan each week/month, but the equity that you directly create will be much more easily accessible (just withdraw from your offset account).