New investors - I/O vs P & I and the lowest rate

Agree. If you are restricted to buying and holding and paying down properties slowly with P&I it is one way but with today's prices where does that lead you when there are limited properties that are neutral or cash flow positive you would be more or less tied to your job to pay things down. Unless one does short term leasing (airbnb, stayz). Buying and holding was most definitely the right way 10 years ago or less when prices weren't high or before boom times.

I feel as things change climate wise in finance, prices, suburbs - one should be looking to innovate or recreate by manufacturing growth and also selling. Property investing to me is a a game of poker (the boom times could be when you get a flush) but you still gotto play the game even if the cards handed to you are not great which would mean folding. It is when you are handed a great hand of cards as in good ips to buy you have to be ready with cash serves taking the opportunities when they come or more or less a show hand.

 

Do you suggest PI is Ok to have if there is no non-deductible debt of PPOR ?
Is the principle paid on IP is actually tax deductable too ?

 

I know hey, people should just "get it" the first time so we don't have to keep repeating ourselves.

 

Principle is never deductible.

PI can work for some. Paying PI can result in a lower rate and can improve serviceability.

 

The answer is... it depends.
IO is great if you can utilise the extra cash flow and make money from it.
If you end up spending the extra, then P&I might be better.

Ever look at people and wonder why they complain about housing affordability even though they have a 6 figure income and no kids.

 

While generally thats true and great in theory but nothing in life is ever that simple.
Otherwise loans to unemployed people, Payday loans to financially uneducated aborigines in remote communities would be more common place etc...

 

And then people complain about why the government isn't doing anything to help them.

 

No it wouldn't, to suggest that means lenders would stop evaluating risk. You could argue they are not giving enough credence to risks but that not even close to what you're saying.

 

People will always do that

 

Not exactly sure what you mean but i'll take it as a light hearted joke. I like to assume the best in others unless proven wrong.

 

Guten Abend Herr Rolf

Und then what happens then.....?

I posted this a couple of days ago...an the response was blase..a very cunning plan for ASIC/APRA to control investment lending..as this will take the sails out of the investment market without increasing zee Capital Ratios which contribute to increased loan rates..