@PersonalFinancewithRaviSharma It'd be great if you could break down how this actually works in a bit more detail. I understand the concept, but actually facilitating the interest-only loan does take away a lot of the realised "tax free money" when refinancing a property asset that has appreciated in value. Yes if it's an investment property all of that interest is tax deductable, but you still need to be able to stay afloat and make interest payments during that financial year. I know fixed interest rates would mitigate the risk and allow you to calculate how many years the newly gained "tax free money" would sustain you for but you would still be having to refinance every couple of years to keep extending the interest-only period (Although that's not necessarily a bad thing assuming your property continues to appreciate).
So does the bank actually lend you the money generated from asset growth of your IPs just as long as your good with LVR? Fair enough if you’re redrawing towards getting more IPs, that reasoning would be accepted by the banks but can you use a reason of using your equity as a yearly income? I suppose that’s where me head is at right now 😊👍
Great work Ravi. Love Part 1 and 2. Part 3 would be great if you have the content. You could cover some specific strategies of turning bad debt into good debt such as debt recycling for instance for those who bought their principal place of residence before investing.
What happens when you go to sell the property and get slammed with capital gains tax and you have borrowed the majority of the equity which requires paying back?
i think that would be a silly move, why would you sell a property with no equity left on it? You would sell a property with equity on it so that you can use that equity to pay back the debt or reinvest. Depends on what part of your planning cycle you are on
@@DesignsByIFR It's not necessarily a silly move if the borrower cannot service the debt and runs the risks of the lender repossessing the property anyway.
Thank you, Ravi. I'm interested in hearing a strategy to prepare for the potential event of acquiring a permanent disability suddenly rendering one unable to work, after acquiring this debt. Appreciate your great work🎉
Ravi, honestly I appreciate all your videos. I’m one of the Ogs been following you for a longtime I don’t even know how long but I have watched every single of your videos some twice or even three times ! I’m about to make some moves and it’s all thanks to your education thanks mate ❤
Great video. Do you think that one day the government will take steps to slow down/ stop tax benefits on investment properties that creates this bigger wealth gap?
Hey Ravi. Love ya video mate. Keep em coming. I'd like to know how to face down the fear. I'm 50 n am rebuilding after divorce a while ago. I am in my own home again now (Perth) with OK equity but amtoo old to start again if investing goes wrong. What do you suggest?
Similar situation…bankruptcy from a bad play in GFC, not divorce. I’m in Perth and 50 this year. I’ve got PPOR & IP. $550k in equity but the fear factor is real….through the roof, because there are no mistakes allowed at 50 because your running out of time to work them through. Yes I’d like to know how to have the balls to pull the trigger again
How does one increase their borrowing power? I have equity from my investment properties, but I am unable to borrow more from the bank because of my lack of borrowing power. Perhaps a video on that would be great. :)
So would that mean if I made 100k a year. I could take 100k equity out to live on which is tax free and then use my taxable income of 100k to pay down the property and get it tax deductible?
If your buying assets and the dollar inflates your assets also inflate but the debt stays the same.... making it easy to pay down the debt well before 50 years.
@@tiptopmuffin Then i lose the tax effectiveness of that debt and question whether or not if i choose to get that debt back will the banks ever give me that level of debt ever again?
