Large loans on PPOR

Hi All

How many people here (as a general discussion) still owe quite a lot on their PPOR?

I still owe approx 80% but have an IP and many people (not on this site, just friends) advise dont invest further until the PPOR is paid off, but I think that is completely wrong. Im going to go for it, I want another IP within 2 years after studying up further.

In the many many years it will take to pay off the PPOR I could have used the amounts for deposits on many IP's in which collectively will go up a lot more in value, not to mention that in 15 (example time to pay off PPOR) years an IP I could have bought today for $350k may be $1m.

Thoughts/comments

:)
 
They have nice PPOR's, really nice actually, but huge loans on them and no intent of IP's. But I suppose that floats their boat, so I need to take in more info from people on here as investing is what I want to do more of and what this site is all about, obviously.

Many people is an overreaction too, more like 3 or 4.
 
We have bought IPs whenever we have had the ability to make the repayments, right through having babies, and upgrading our PPOR twice.

I am with you on the direction you are planning on taking, and it has worked for us. We only ditched our PPOR mortgage a year ago and I am 49. Having a PPOR mortgage never stopped us.

I would add that having IPs meant that I have not had to return to work after having babies. We don't hold many IPs but that is partly because I wanted to be at home with the children. Everyone has choices and that one was easy for us.

Now they are grown, I like my own space so much, that I still don't want to get a part-time job.
 
In the many many years it will take to pay off the PPOR I could have used the amounts for deposits on many IP's in which collectively will go up a lot more in value, not to mention that in 15 (example time to pay off PPOR) years an IP I could have bought today for $350k may be $1m.

Thoughts/comments

:)

You are right. It just may be a higher risk strategy so people are not so comfortable with it - especially if x-collateralised; you could lose your home if it goes pear-shaped. It will certainly give you the ability to control more property if you don't worry about your PPOR debt. Many people have no intention tio pay down the PPOR.

As to your question about owing a lot on the PPOR, how does a shipload sound? Bought a PPOR last year after renting for 8 yrs whilst buying IPs.
 
Sounds like what you're describing is a group of "Keeping up with the Jones". A whole bunch of pretty things, a pretty house, lots of debt and no retirement plan. I suggest you follow these forums if you want to be wealthy and can ignore all that nosense. :) There are plenty of people on here with knowledge and advice to help you work out what you want, but firstly you need to know what you want.

Me personally, I have a PPOR and have no plans to pay it off before investing. Some people don't even pay down their PPOR, they have it interest only. I can't bring myself to that, so my repayments are P&I. I have bought IP 1, and looking to buy IP 2 next year. I guess it's all depends on what you feel comfortable with and how much risk are you willing to take. My cashflow is good, my first IP is slightly negatively geared, so I'm currently saving to get myself a cash buffer and a deposit for IP 2. I'm not a big risk taker, however I appreciate you need to take some risk in life to get ahead, so that's what I'm doing, but with buffers in place in case things turn bad.
 
Sounds like what you're describing is a group of "Keeping up with the Jones". A whole bunch of pretty things, a pretty house, lots of debt and no retirement plan.QUOTE]


I agree, its all about a retirement plan and the ability to have 3, 5 or 10 or more houses in 30 years that are generating a very healthy liveable income because you bought them so long ago.

Im definitely following the IP route. To retire at 55 a very healthy and happy man would be fantastic
 
We only bought our PPOR a couple of years ago, it was a 97% LVR. It would still be nearly that much LVR, except that we have seen significant (100k+) capital growth since we have bought it.

Personally, I believe that servicability and ability to repay the mortgage repayments (ie cashflow) is sooo much more important then your LVR.
 
When we eventually get a new PPoR whenever it is they get around to building it, the loan on it will be around the same as the loan on the other two houses combined. But then its value will be around that of the other two combined as well.

But then we aren't exactly building the 'ultimate' PPoR so it'll get demoted to an IP for when Child Elder goes to high school - I want her to have her own ensuite so she can be a cantankerous teenager and not need to share a bathroom with two preschoolers. And I still want to sell my first house ...
 
Thankfully have never had a PPOR mortgage however have a 101 clients who have purchased a 8-10 IP's with a current non deductible debt.

As long as you can service the loans and do not put yourself at any form of repayment risk cant see an issue whatsover.

Immagine what IP prices would be if you waited 25 years for the PPOR loan to be cleared.
 
Fully with Richard (and most other posters) on this one.

I have sometimes sold IP's in the past and used those proceeds to reduce my PPOR debt, because I like to see it moving down. That technique could be argued for and against ad nauseum here (so please don't), however I would tell your 3 or 4 friends that your house will be paid off before theres is if you buy IP's. They won't change their mind, but they may be less inclined to sprout their mouth off in future.

The thing that always amazes me about property investment is this: Some people just don't see how it easy it is.

Particularly if you can start when your 35 or younger, and you have 20 years to build the wealth until early retirement.
 
You know the one I like, is when certain people (some friends like these) do see you going well and their comeback is its because Im a tight ***.

Well if tight *** is another word for being calculating & using my money wisely then I accept the term in full ;)
 
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