Hi all,
I am wondering what peoples' thoughts are on the following. We are currently getting financial and planning for IP# 4/5, in doing so we are doing projections for rate rises up to 8% to see how our cash flow will be affected under different scenarios. Currently with 3 IPs we are cash flow positive by around 10k pa and with our next purchases, in line with our strategy, this may come down to about 7k.
However, when we factor in rates of 8% this becomes 18k neg! Our situation is ok as we have a reasonable amount in our offset, good wages and will look to sell an under performing property to reduce debt.
I have read lots of stories on here in the last 12 months (the golden age of rates!!!) and see lots of people who are currently sitting at neutral or slightly negative.
I would like to hear how experienced investors have considered rate rises in their overall strategy and also how/if newbies have done this? As some food for thought, a rate rise of 3% on a 500k debt will result in 15k extra in repayments, or about 300pw (obviously less after tax). This may be easy for some but I bet some may not be able to maintain their same standard of living when this occurs.
Looking forward to your responses.
I am wondering what peoples' thoughts are on the following. We are currently getting financial and planning for IP# 4/5, in doing so we are doing projections for rate rises up to 8% to see how our cash flow will be affected under different scenarios. Currently with 3 IPs we are cash flow positive by around 10k pa and with our next purchases, in line with our strategy, this may come down to about 7k.
However, when we factor in rates of 8% this becomes 18k neg! Our situation is ok as we have a reasonable amount in our offset, good wages and will look to sell an under performing property to reduce debt.
I have read lots of stories on here in the last 12 months (the golden age of rates!!!) and see lots of people who are currently sitting at neutral or slightly negative.
I would like to hear how experienced investors have considered rate rises in their overall strategy and also how/if newbies have done this? As some food for thought, a rate rise of 3% on a 500k debt will result in 15k extra in repayments, or about 300pw (obviously less after tax). This may be easy for some but I bet some may not be able to maintain their same standard of living when this occurs.
Looking forward to your responses.