17-12-2012, 09:13 AM
(16-12-2012, 11:26 PM)Share Investor Wrote: [ -> ](16-12-2012, 10:13 PM)Temperament Wrote: [ -> ]Actually, there are always pros and cons in anything. If i am buying a 2nd FH property for collecting rent then it may O. K. to max out the loan period allowed. In fact prolong to next generation is even better so that my rental property is "always' positive cash flow due to very low loan repayment. No?
If the loan interest is attractively low and I can get higher returns elsewhere, I would borrow to the max. Better to be allowed to repay only the interest.
It is not too long ago that SPVs believes riding down the curve ie borrow short lend long, will last forever before that dream was awoken by the credit crisis.