Should You Ever Pay Off Your Property?
- By Brett Wood
- Published 02/13/2008
- Investing
- Unrated
Brett Wood
Brett Wood is a successful new build property investor in the United Kingdom. His strategies have helped 1000s of investors to get on the property ladder and build successful property portfolios. For further details contact Brett Wood at or directly on 0870 042 1188.
View all articles by Brett WoodShould You Ever Pay Off Your Property
This question needs to be broken into two questions. Should I ever pay off my home? Should I ever pay off my ?
Let's deal with the home first. Yes you should pay off your home eventually because it is a non tax deductible expense if it relates to your principle place of residence. OK, so that was the accountants speaking in me and since I am a very poor accountant lets put my investors hat on.
The extension of this answer is that until you have build up a significant enough portfolio to maintain momentum in your think it is safe to say that most people have a home with significant equity especially if you have owned it more than 2 years. This equity is the key to build wealth.
By accessing this equity and using the leverage of a mortgage on your buy to let properties you can turn £100,000 equity into a million pound portfolio. The sole purpose of you do this is to gain the advantage of capital growth. Until such a time your portfolio self sustains its growth, you cannot afford to pay off your mortgage.
Once you have developed your portfolio then and only then can you take your principle place of residence out of the investment portfolio.
OK, now the . You should never pay off your mortgage down on these, always opt for interest only because your mortgage balance will remain the same throughout but your value will double, halving and more your mortgage.
When you consider that the biggest challenge with building a portfolio is maintaining cash flow, why would you pay additional money into the property when you know it's going to double in the next 7~10 years. You are far better reinvesting the cash flow in further properties. Long term this more effective use of your time. It also limits the amount of tax you pay.
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Brett Wood is a successful property investor in the United Kingdom.
For further details contact Brett Wood at or directoly on 0870 042 1188.
Let's deal with the home first. Yes you should pay off your home eventually because it is a non tax deductible expense if it relates to your principle place of residence. OK, so that was the accountants speaking in me and since I am a very poor accountant lets put my investors hat on.
The extension of this answer is that until you have build up a significant enough portfolio to maintain momentum in your think it is safe to say that most people have a home with significant equity especially if you have owned it more than 2 years. This equity is the key to build wealth.
By accessing this equity and using the leverage of a mortgage on your buy to let properties you can turn £100,000 equity into a million pound portfolio. The sole purpose of you do this is to gain the advantage of capital growth. Until such a time your portfolio self sustains its growth, you cannot afford to pay off your mortgage.
Once you have developed your portfolio then and only then can you take your principle place of residence out of the investment portfolio.
OK, now the . You should never pay off your mortgage down on these, always opt for interest only because your mortgage balance will remain the same throughout but your value will double, halving and more your mortgage.
When you consider that the biggest challenge with building a portfolio is maintaining cash flow, why would you pay additional money into the property when you know it's going to double in the next 7~10 years. You are far better reinvesting the cash flow in further properties. Long term this more effective use of your time. It also limits the amount of tax you pay.
------------
Brett Wood is a successful property investor in the United Kingdom.
For further details contact Brett Wood at or directoly on 0870 042 1188.