paying off loan
- Thread starter neeko
- Start date
"mate" you've been watching too many bank tv commercials.
How many is "a few"?
If you're that debt averse, how are you going to feel about getting into serious debt to buy a couple of IPs?
Doing less paid work.....
The Y-man
Surely that's way too simple... why not seutp a few different things that have 3 letter acronymns as titles etc and invole a few legal & finance peopel to set it all up for a few $000 and acheive the same result as you are know !
You would then have an interesting answer to give people shudl they ask you something !
I'm assuming your pay was quite high to buy 10 IP's in a single year yea?
Yes and no.
1. We were DINKs - but both our main jobs were fairly standard professional salaries. But we also both worked second jobs on some nights after our dayjobs.
2. Only one of those 10 was a house, 2 were villa units, and the rest 1 or 2 bedroom apartments.
3. We had a fair bit of money saved up due to a prior event (more details in the interview forum
) and a favorable sharemarkethttp://www.somersoft.com/forums/showthread.php?t=27374
Cheers,
The Y-man
This will win the title of Australia Got Talent!
Neeko,
This statement shows you don't understand the concept of equity.
Equity is the amount of the property you 'own' over and above the loan. It is not cash. So if you want to buy something with the equity you would have to borrow from a bank.
To pay off a PPOR loan with equity would mean you have to borrow from the bank, so you would just be paying one loan off with another.
That's what's happening to me. It's really quite difficult when your friends don't share your passion.
Thank god for my bf and this forum, otherwise I'd be going nuts.
I had to get my head around this, since I don't know much about all this stuff myself...
My confusion thing about this is...just because your place is apparently worth say, $400k and you only have a loan of $250k...so what?
I see it as a similar thing to being able to draw down your superannuation to buy a property (which I think is a GOOD idea in some circumstances)...in that, say you "withdrew" $150k in equity...(which doesn't exist yet of course until you sell)...to help pay off the $250k mortgage...
If you then sold, you'd still get $400k or thereabouts...you know? People will pay what they'll pay...
Would you then be expected to pay BACK $150k of that money from the sale to the lender?
My confusion thing about this is...just because your place is apparently worth say, $400k and you only have a loan of $250k...so what?
I see it as a similar thing to being able to draw down your superannuation to buy a property (which I think is a GOOD idea in some circumstances)...in that, say you "withdrew" $150k in equity...(which doesn't exist yet of course until you sell)...to help pay off the $250k mortgage...
If you then sold, you'd still get $400k or thereabouts...you know? People will pay what they'll pay...
Would you then be expected to pay BACK $150k of that money from the sale to the lender?
this is gold, u buy a house for $200k it goes up to $400k and then u use the 'equity' to pay off the $200k loan and u own outright, gold!
not quite sure how the banks shareholders get dividends from the equity in the house in exchange for the loan but hey who cares!
reminds me of a woman i spoke to ( been to too many seminars i think)
wanted to use equity in her house as deposit for ip, thought the vendor would accept the equity (or actually the fact she had equity in her home as deposit, she wasn't interested in accessing it to give vendor any cash just wanted to use the 'equity'.
it is a great concept really, i wonder how many times u could use the same equity to buy different stuff, could be endless really, unlimited purchasing power
not quite sure how the banks shareholders get dividends from the equity in the house in exchange for the loan but hey who cares!
reminds me of a woman i spoke to ( been to too many seminars i think)
wanted to use equity in her house as deposit for ip, thought the vendor would accept the equity (or actually the fact she had equity in her home as deposit, she wasn't interested in accessing it to give vendor any cash just wanted to use the 'equity'.
it is a great concept really, i wonder how many times u could use the same equity to buy different stuff, could be endless really, unlimited purchasing power
it is a great concept really, i wonder how many times u could use the same equity to buy different stuff, could be endless really, unlimited purchasing power
during the good times Mezz finance was pretty much like that
ta
rolf
Came across this pic today and it made me think of this thread.
As it comes from Failblog I would assume that yes he has failed.
Buying and IP won't pay your PPOR mortgage any quicker - unless it is massively cashflow positive (money in your pocket) ... in which case it is unlikely to get you much in the way of capital gains (increase in value).
The majority of newly purchased IP's are either negatively geared (you have to pay out more than the rent brings in) or hover around neutral.
The secret is then to wait. Rents will slowly go up so the property will become positive cashflow. The value of the house will go up. You can either sell and take the extra value to pay off your PPOR or take the positive money in your pocket and do the same.
Just be aware that it may take many years to be in that situation.
Y-man did good, buying before a massive boom and selling just after the peak - and even then it took 6-7 years to reach such a position. We are not likely to see a repeat of such a boom for a long time as we are entering a period of stagnation ... similar to the long 10+ year stretch of not much happening during the 1990's.
The majority of newly purchased IP's are either negatively geared (you have to pay out more than the rent brings in) or hover around neutral.
The secret is then to wait. Rents will slowly go up so the property will become positive cashflow. The value of the house will go up. You can either sell and take the extra value to pay off your PPOR or take the positive money in your pocket and do the same.
Just be aware that it may take many years to be in that situation.
Y-man did good, buying before a massive boom and selling just after the peak - and even then it took 6-7 years to reach such a position. We are not likely to see a repeat of such a boom for a long time as we are entering a period of stagnation ... similar to the long 10+ year stretch of not much happening during the 1990's.
