Be careful with this strategy; Buying one quality property (eg, as close as you can to CBD) might be better than buying several cheapies.
who has these $400k mortgages ?
- Thread starter WillG
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Be careful with this strategy; Buying one quality property (eg, as close as you can to CBD) might be better than buying several cheapies.
Would you sugest moving into the property and renting our detached town house out?
Im just thinking that we may be able to pay enough off the mortgage on the townhouse so that if we look at buying a bigger house say by the end of the year to move into we could refinance the town house on a 30year interest only loan and bring it in at CF+ve or near as dam to it.
Cheers
Since escaping the non tax deductible debt train at 26 and paying off our mortgage I have now developed a phobia of non deductible debt! It's scary.
When we had a mortgage, it was small anyway but all seemed well. Since we have paid out the mortgage we have so much more cash per month it's like living a dream. We have investment properties and are doing development seperate to our jobs and live in a brand new house worth $450k+ that is great. It's not in the suburb of my dreams but we're working towards that as part of a medium term plan. People these days seem to want it all too early.
Pay out your principle residence mortgage the earliest you can. It is a memorable occasion. We are both professionals and earn arond $250k a year which to most people seems like easy street, but we studied and worked hard to get the jobs we have. And most of the money we have made has been via property improvement etc.
When we had a mortgage, it was small anyway but all seemed well. Since we have paid out the mortgage we have so much more cash per month it's like living a dream. We have investment properties and are doing development seperate to our jobs and live in a brand new house worth $450k+ that is great. It's not in the suburb of my dreams but we're working towards that as part of a medium term plan. People these days seem to want it all too early.
Pay out your principle residence mortgage the earliest you can. It is a memorable occasion. We are both professionals and earn arond $250k a year which to most people seems like easy street, but we studied and worked hard to get the jobs we have. And most of the money we have made has been via property improvement etc.
Excellently done Nats,
I totally agree with that philosophy of paying down the PPoR debt first (and other consumer debt as well).
But to be the Devil's Advocate for sec; what do you say to the Bill Zhengs of the world who say don't pay off any debt?
Hmmm, LA Aussie it is an interesting one. But to be retired and living off my investments I believe in paying down debts to a suitable level that income exceeds debt. without that there's no retirement. And non deductible debt is usually linked to $0 income because you live in the house. Hence I don't believe in non-deductible debt.
I am all for tax deductible debt though and I believe in using debt as a tool to make suitable returns.
One thing I have learnt about myself more recently is I can't just buy places and sit and wait for capital growth etc. I always have to be renovating, subdividing, developing etc because that's what I find to be enjoyable and fulfilling. And doing that usually requires me to carry decent debt - just that it's all deductible.
Well said again.
I'm the same; why not pay down the debt (tax deductible and non) and increase the equity yourself, and at a faster rate.
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