Hi All,
When looking at the property investors case studies in the magazine, you have people on 80K having portfolios of 5 million dollars in 5 years with the strategy 'buy & hold'. How do they do it? I understand equity, but equity is not liquid money.
Speaking with my bank, my understanding is that bank is looking at loan serviceability, and what would happen if rate went up or property market lost value.
So this means that your equity might go up, but there is a limit of how much bank would give you based on your wages.
In my example, bank said that although equity goes up, the maximum they would ever allow me to borrow on current income is 870K. Which is 3 properties (I have 2 already).
My properties might be generating income, or paying for themselves, but this is not taken into account.
When looking at the property investors case studies in the magazine, you have people on 80K having portfolios of 5 million dollars in 5 years with the strategy 'buy & hold'. How do they do it? I understand equity, but equity is not liquid money.
Speaking with my bank, my understanding is that bank is looking at loan serviceability, and what would happen if rate went up or property market lost value.
So this means that your equity might go up, but there is a limit of how much bank would give you based on your wages.
In my example, bank said that although equity goes up, the maximum they would ever allow me to borrow on current income is 870K. Which is 3 properties (I have 2 already).
My properties might be generating income, or paying for themselves, but this is not taken into account.