Hi Guys,
A lot of the books I have been reading mention that living off equity is the ultimate goal. So do not have to continue your day job to support yourself and your investments but rather use your equity to cover living and interest expenses.
Has anyone achieved this and done it in the long term?
I am assuming what the bank gives you, it can take away. For example if I got a 200k LOC, and I lived off 6k a month using a portion of that to cover the interest.
If property prices were rising I am guessing it would not be to difficult to extend that LOC assuming some CG in my properties and my LVR was ok
What if we had a fall in house prices, what would it take for the bank to reduce or cancel my LOC?
If after 15 months I had spent 100k or my 200k, and house prices had been falling could the bank cancel my remaining 100k?
This would leave me in a bad position of having no cash to cover the interest on the 100k I had already spent would it not?
I know I might be over thinking as I have been told before but I just like to understand.
Thanks
A lot of the books I have been reading mention that living off equity is the ultimate goal. So do not have to continue your day job to support yourself and your investments but rather use your equity to cover living and interest expenses.
Has anyone achieved this and done it in the long term?
I am assuming what the bank gives you, it can take away. For example if I got a 200k LOC, and I lived off 6k a month using a portion of that to cover the interest.
If property prices were rising I am guessing it would not be to difficult to extend that LOC assuming some CG in my properties and my LVR was ok
What if we had a fall in house prices, what would it take for the bank to reduce or cancel my LOC?
If after 15 months I had spent 100k or my 200k, and house prices had been falling could the bank cancel my remaining 100k?
This would leave me in a bad position of having no cash to cover the interest on the 100k I had already spent would it not?
I know I might be over thinking as I have been told before but I just like to understand.
Thanks