All Topics / General Property / Commercial Property Loans
In the bonus chapter Steve mentions that you should always repay your debt to help manage interest rates rises. The line below bring me to my question.
“Plan to repay debt: Except for the commercial property that we own, all other dwellings in our portfolio are on principal and interest repayment terms”
Why are commercial properties not on a principal and interest loan and why do you not want to repay the debt on them?[biggrin]
usually because commercial prop. are more secure in terms of rent. The other option is that you probably don’t ever want to own a commercial property – you’ll on-sell it later on for a higher capital gain but it is goodto own residential – that’s why you pay residential off.
“If You never never ask, you’ll never never know”
Thanks Geo.
I am curious as to why you don’t want to own commercial property.[cap]
me personally – I would like to own them – Steve probably doesn’t – so he mentioned it in the book from his perspective as I would believe. But there are many factors that differ commercial from residential. The other reason is that some institutions will increase the interest rate when you take out a commercial loan – so Steve maybe mentioned about paying off ineterest only from this perspective because the rates will be higher and you want the deal to remain +CF.
“If You never never ask, you’ll never never know”
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