earning 40k (first yr uni)
want to buy a house next yr (230k)
w/ 46k deposit (hopefully 20%)over 3 years, pump 40k principle, as well as pay loan @ 9.0-9.5%
QUESTION 1
what happends if i wont to get another after 3 years?
how does using equity help, how do people get to 100 properties in say 7 years.
how can they aford such interest? and keep it going….?i bought the book 0-260 today (hopefully it'll help)
any opinions?
QUESTION 2
Also, when people take out equity, in teh future to buy a car (expensive one) for example,
they still have to pay interest on that loan right?
so whats the point?Equity is just another smart way for banks for make money from you… "be smart, use your house as equity"
you will pay lower interest rates on a equity loan rather then say a 13% car loan, also the loan term with equity is much longer…
Its really good because after your house magically becomes worth double a few years after buying it (Even though the actual house is now older and more worn then it was when you bought it) you can use that new magically wealth that came out of no where that no one has to earn to purchase all the toys you ever wanted, or that special holiday to fiji.
But what happens when you loose that 100k pa resources boom job ? its allright because the bank will take back all those toys along with your house that you thought was yours, but really was owned by the bank…
Equity is almost like selling your soul for a piece of cake, Its good while your busy eating the cake but once the cake is gone so is your soul.
If you use an equity loan to buy a car that goes down in value over time then you are using it for bad debt
If you use an equity loan for a deposit for another investment property loan for a property that goes up in value over time this is good debt.
How do you own 100 properties in 7 years ? Well it is really hard now that the property values are so high. Basically if you read the book it will suggest buying cheaper properties and having positively geared properties. This means each property costs you zero to own while tenanted or actually makes you a small income. A small income x 100 properties becomes a reasonable income.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
