Some advocates talk about buying xx amount of properties and then letting them mature (double in 10 years etc) and then retire and live off the equity.I assume that if someone takes out their equity, that will force the bank to refinance their loan. How is it that the banks don’t question their ability to pay back the loan ,after refinancing,if they claim to be retired.
[blush2]
scullyman,
Surely it’s a big numbers game. Get the numbers up to a level where they dwarf your private consuming level…and viola.
If you have 5 MM in assets with say 4 MM in debt, and over time the assets grow to be 20 MM whilst you are working and the debt level remains constant, surely it would be reasonable to approach the bank and say can I up my debt levels from 4 to say 4.1 so you can live off the 0.1 every year.
I reckon at that level, the assets might be sneaking along, equity-wise, just a tad faster than you and your partner can consume it.
With security over the props, why would the banks be concerned ??
Are they actually refinancing to access equity or simply selling up and pocketing their CG? Family freinds did this then rolled most of the profit into an annuity which subsidises their pension enough so that they are now enjoying a comfortable retirement.
The Investors Club use this theory. Try their website at http://www.investorsclub.com.au for the full story.
Do a search here, there was a (heated) debate on this topic a few months ago- maybe 6.
basically, if you have equity, then you can get loans, so as long as your portfolio is growing faster than you can spend it you will be ok.
Terryw
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Originally posted by Dazzling:[/i
Surely it’s a big numbers game. Get the numbers up to a level where they dwarf your private consuming level…and viola.
Whats the wooden musical instrument got to do with it ??? ( confused)[confused2][blink]
kp
hi all
apart from the violin dazzling was talking about it is correct.
If you diversify across different types of investment then you can’t send more then the growth of your portfolio and sorry dazzling in this case size doesn’t matter, its the time you start the process and the system.
When and how to add either growth or more vehicles this is not a property only system and is a structure similar to a house
you first build a one br house then add another room(an investment) then another room and another and if you started at 16 doing this and always worked on it by the time you are 40 you have a 30 br house then retire and live of the people in your 30br boarding house.
Its simplistic but is very similar, there is alot involved in it.
As for banks no they look at these systems and like to lend to them because of cash flow and equityhere to help
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