The Two Scenarios Say you’re conservative and purchased three properties as a whole and put them on interest-only loans.
The 2 situations we’ve are:
Link between the Situations
The essential difference between the 2 scenarios is significant. At the conclusion associated with 30 12 months- period:
In Scenario # 1 you might have one property that is freehold simply over $2 million (using 5% compounding growth each year).
It is the period that is same aided by the same-priced homes, but Scanario#2 produces 227percent associated with wide range of Scenario # 1.
One explanation some investors shy far from interest-only loans could be the concern with increased repayments in the event that period that is interest-only at the finish of 5-10 years. This could suggest the investor will have to spend from the principal in 20-25 years and face greater payments.
Once you operate the figures, these worries are mathematically irrational. Voir la suite