Congratulations!!!
Robert Bou-Hamdan
Mortgage Advisergood property, good agent and now a goooooooooooood new owner.
Great to see the win there and where is the next one???
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Originally posted by lea:Quote:Originally posted by The Mortgage Adviser:
Okay – so I got online and altered my investment mortgages to interest only. I understand now what you mean about leaving the excess in the offset account. I can use it later. Good point. My original logic was, if I pay off some principal, then it increases my equity (coz house prices aren’t going anywhere here, so I can’t rely on capital growth – yet). But the offset should have the same effect – right?Quote:…LeaHi Leah
Congratulations on your decision to buy, but more significantly on your decision to go Interest Only.
Why? Because apart from the fact that all the seriously rich investors I know on this forum and elsewhere go IO, my main reason is this:
1. Suppose you get to the point in the next 2-3 years where you control a mini empire of +CF properties. Your Gross Worth is $3 million, you owe the bank $2 Million, so your Net Worth is a mere $1 Million
2. You make absolutely no effort to pay down your loans, but keep merrily on your way buying more properties.
3. Suppose it takes 7, 10, 12, or 14 years before we get another “Property Boom” and your portfolio doubles (with no effort on your part). It’s now worth $6 Million, you still owe the original $2 Million, and your Net Worth is a massive $4 Million.Not a bad lurk, don’t you think? And this assumes you buy no more properties in the next decade or so. Like, that’s gonna happen, right? [cap][cap][king][thumbsupanim][thumbsupanim]
Cheers
Greg
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