My Question is quite simple, if you use the equity in existing properties to by more properties i understand that your equity will eventually be sky high but so will your debt! wont it?[strum]
Um yes, but rents used to cover the debt payments, it is good debt, income producing etc.
FATMAN
This is why Steve and Dave advocate using cash to fund deposits and costs rather than use equity loans. Which is all fine and dandy if you have cash.
I currently rely on equity loans to finance deposits and costs for new purchases, but am also looking at ways to pay down these debts. Ideally, you sell property and put the profits toward paying down your debt so that you are not so exposed to rising interest rates.
But you’ve got to start somewhere. Just be cautious though and when calculating your positive cash flow make sure you factor in the interest on the loan over the property and the interest on your equity loan.
Good luck!
Janet
Janet
0427 778875
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