Рубрика: long term installment loans

The 2 Scenarios Say you had been conservative and purchased three properties as a whole and place them on interest-only loans.

The 2 Scenarios Say you had been conservative and purchased three properties as a whole and place them on interest-only loans.

The 2 situations we’ve got are:

Link between the Scenarios

The essential difference between the 2 scenarios is significant. At the conclusion of the 30 year- duration:

In situation # 1 you will have one freehold property worth simply over $2 million (using 5% compounding growth each year).

It is the same period, because of the same-priced homes, but Scanario#2 produces 227percent of this wealth of Scenario # 1.

One reason some investors shy far from interest-only loans may be the concern about increased repayments in the event that period that is interest-only at the finish of 5-10 years. This will suggest the investor would have to spend from the principal in 20-25 years and face higher re re payments.