How To Pay Your Loan Off FAST!
My Property Investment Tip #32
Method 5 of 7. Turn Your Surplus Rents Back Onto Your Home Loan
Ready for the next tip? This one applies once you have more than one property.
Two key points to remember about the mortgage on your own home, verses those on your investment properties.
1. YOU are responsible for paying it off (not tenant income to use), and
2. The interest charges are not tax deductible.
So… one of the reasons most investors will have all their investment loans on interest-only, is so that they can put the maximum amount of cashflow towards their own home loan.
Why pay off any tax deductible debt, before you clear any deductible debt. Quite simple really.
As the rents on your investment properties climb, they will become more & more cashflow positive. Leaving you with a surplus every month.
Use that surplus to smash your original home loan. As time goes by, that surplus will get greater and greater, and the speed that you pay off the original home loan will increase dramatically!
Btw… if you would like a positive cashflow investment property or two, in a capital city location, right next to a massive infrastructure investment hotspot, I know a guy 😉
So if you still have a mortgage on your own home, you will find that using your spare cash/equity to buy a few investment properties, will actually pay off your home much faster than just slugging away at your existing mortgage with what’s left of your work income. Work smart, not hard.
– Daimo