1. Change over from a principal and interest to an interest-only loan
When building up their property investment portfolio, a lot of investors make the mistake of taking out a principal and interest loan.
I say “mistake” because this kind of loan can put a stop to your investing career before it’s even off the ground. When you’re building up your portfolio you want to gain as much equity as possible – equity which you will then draw from your properties and use to buy more investment properties.
How many investment properties do you need? In today’s market it takes about six to become financially independent. Although it’s great to pay off debt, you don’t want to stop at one or two. That’s why an interest only loan is the best loan type at this time. Once you have reached your goals and begin to consolidate your portfolio, you can choose to switch to a principal and interest loan and begin paying down your debt.