Hey all - I've been interested in getting into property for years now, but have been travelling the world with the wife for the last few years so it's been at the back of my mind. Now I'm back in Brisbane and settling down with a munchkin on the way, and getting back into it - although probably still 12 month away from buying my first, never too early to start learning, right? So I thought I'd ask a really obvious question that I can't find a ridiculously easy answer to.
I understand the difference between P&I and I/O, and that I/O opens up more cash flow, although you're not paying off the actual principal. Isn't this delaying the inevitable? Very basic googling seems to suggest that the I/O period of most loans are 1 - 5 years, and after that converts to P&I. Is that right?
Basically, I love the idea of using I/O and allowing me to purchase more property with higher cash flow. But at what point would I need to pay back the interest - selling the place after 5 years at a profit isn't really what I had in mind, more of a "buy and hold" guy I think.
Any thoughts would be fab - cheers kids!
-Adam
I understand the difference between P&I and I/O, and that I/O opens up more cash flow, although you're not paying off the actual principal. Isn't this delaying the inevitable? Very basic googling seems to suggest that the I/O period of most loans are 1 - 5 years, and after that converts to P&I. Is that right?
Basically, I love the idea of using I/O and allowing me to purchase more property with higher cash flow. But at what point would I need to pay back the interest - selling the place after 5 years at a profit isn't really what I had in mind, more of a "buy and hold" guy I think.
Any thoughts would be fab - cheers kids!
-Adam