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  • Paying Off Debt

    This question came about from another recent thread on - 'Property Prices - How Important Are They?'

    I would be interested to know how much debt people are paying off their loans with their investment properties over the last 5 years, whether on I/O or P & I.

    Regards
    Graeme Fowler
    45
    Interest Only - $0 - $10,000
    26.67%
    12
    Interest Only - $10,000 - $50,000
    8.89%
    4
    Interest Only - $50,000 - $100,000
    2.22%
    1
    Interest Only - $100,000 - $250,000
    4.44%
    2
    Interest Only - $250,000 +
    11.11%
    5
    P & I - $0 - $10,000
    6.67%
    3
    P & I - $10,000 - $50,000
    20.00%
    9
    P & I - $50,000 - $100,000
    6.67%
    3
    P & I - $100,000 - $250,000
    6.67%
    3
    P & I - $250,000 +
    6.67%
    3

    The poll is expired.

    Facebook Property Chat Group NZ
    https://www.facebook.com/groups/340682962758216/

  • #2
    I got my debt down to about 1/2 of what it started at (down to 40% from 80%) but I withdrew it all and more to get my PPOR. So my PPOR is at about 50% and my rental at about 100% but net 80% finance. The plan is to get the PPOR down to zero before I attack the rental.

    Comment


    • #3
      Just a thought, leave your PPOR out of it, so don't add this into it.

      Also, if you have sold any property, this is not to be included in debt repayments.

      Only rental properties that you still have - how much debt has been paid off over the last 5 years.

      Regards
      Graeme Fowler
      Facebook Property Chat Group NZ
      https://www.facebook.com/groups/340682962758216/

      Comment


      • #4
        It would be more applicable to ask this as a percentage of your total debt rather than a dollar valie. IMHO
        www.3888444.co.nz
        Facebook Page

        Comment


        • #5
          It would be more applicable to ask this as a percentage of your total debt rather than a dollar valie. IMHO
          Hi Keys,
          Maybe, you do another one then.

          Regards
          Graeme Fowler
          Facebook Property Chat Group NZ
          https://www.facebook.com/groups/340682962758216/

          Comment


          • #6
            So far, only 19 people have put in their info into the poll, 8 on I/O and 11 on P & I.

            From what I have been told by various bankers is that there are far more people on I/O, so is it that those of you on I/O are just not filling out the form to vote on?
            With over 300 looks at the thread, surely there must be more people than that with investment properties.

            Also, for the 4 on I/O that said you have paid over $100,000 off the loans, I would be interested to hear how and why you did that i.e. what was the reason for it, and where did the money come from to do it?

            Regards
            Graeme Fowler
            Facebook Property Chat Group NZ
            https://www.facebook.com/groups/340682962758216/

            Comment


            • #7
              My best guess: the $10-50k
              bracket in the last five years.
              Just possibly a little over $50k.
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              Comment


              • #8
                Orion -

                I would have voted - but you dont want to count PPOR, and theres been no point paying off debt on an IP with a mortgage on a home as well. Ive paid off a lot of mortgage debt in the last few years - should be done with the personal mortgage in the next year.

                Does that help?

                Comment


                • #9
                  My best guess: the $10-50k
                  bracket in the last five years.
                  Just possibly a little over $50k.
                  Thanks Perry.

                  I would have voted - but you dont want to count PPOR, and theres been no point paying off debt on an IP with a mortgage on a home as well. Ive paid off a lot of mortgage debt in the last few years - should be done with the personal mortgage in the next year.
                  Hi Avalon, so the answer is zero. I did ask a while ago for the poeple that said in the poll they have paid off over $100,000, to answer the questions I asked. So far nobody out of 7 has done so which probably means, like you, it was either paid off their own home, or they are just making it up.
                  If you do end up paying down debt on your rentals after your own home is paid off, well done.
                  You will be the first to do it that I know of.

                  Regards
                  Graeme Fowler
                  Facebook Property Chat Group NZ
                  https://www.facebook.com/groups/340682962758216/

                  Comment


                  • #10
                    Leaving out the PPOR seems perverse,
                    if it's being/been used/leveraged to buy
                    the IPs.

                    So what's with that rationale?
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                    Comment


                    • #11
                      Leaving out the PPOR seems perverse,
                      if it's being/been used/leveraged to buy
                      the IPs.
                      So what's with that rationale?
                      Hi Perry, not sure what you mean, can you clarify and expand, thanks.

                      Regards
                      Graeme Fowler
                      Facebook Property Chat Group NZ
                      https://www.facebook.com/groups/340682962758216/

                      Comment


                      • #12
                        If the equity in the PPOR is being used as collateral
                        to create debt to buy an IP, then paying that down
                        would seem to be a consequential part of being a PI.
                        And if that's so, why would one exclude debt paid
                        down on the PPOR from your survey?
                        Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

                        Comment


                        • #13
                          If the equity in the PPOR is being used as collateral
                          to create debt to buy an IP, then paying that down
                          would seem to be a consequential part of being a PI.
                          And if that's so, why would one exclude debt paid
                          down on the PPOR from your survey?
                          Hi Perry,

                          Because what happens is people do pay their own home loan down, while using I/O on the rentals, but they get into that habit and don't ever seem to break it (apart from maybe 1 in a 100 that eventually get it). What happens is that if they actually pay off their home loan in full, and now lets say they save up $50,000 in the bank, rather than pay this off rental property debt, they buy another rental property and borrow against their own home equity again. Usually what happens though is - they wait until their PPOR is paid down enough in order to buy another rental on I/O and leverage up again. Therefore, they never pay off their investment debt and (usually) they are highly leveraged at between 70% - 95% once again in most cases. Or of course until property drops enough to get themselves wiped out financially like so many others have done recently. But of course, it won't be their fault, it will be the fault of the market, something that couldn't have been known or planned for, maybe an act of God or something well beyond their control.

                          Regards
                          Graeme Fowler
                          Facebook Property Chat Group NZ
                          https://www.facebook.com/groups/340682962758216/

                          Comment


                          • #14
                            Originally posted by orion View Post
                            (apart from maybe 1 in a 100 that eventually get it).
                            I think many newbies would find that remark
                            rather enigmatic, Graeme. Perhaps you should
                            fill them in with some more detail? About "it."

                            (Bold emphasis is mine)
                            Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

                            Comment


                            • #15
                              I think many newbies would find that remark
                              rather enigmatic, Graeme. Perhaps you should
                              fill them in with some more detail? About "it."
                              Hi Perry,

                              That what I've been saying on PT for the last 5 or so years that I/O is a highly risky strategy - similar to gambling.

                              Regards
                              Graeme Fowler
                              Facebook Property Chat Group NZ
                              https://www.facebook.com/groups/340682962758216/

                              Comment

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