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In this episode of the HMO Property Show, host Neil Gabe discusses the power of debt reduction in property portfolios. He explains that while interest rates have risen significantly, putting many investors underwater on their properties, HMOs are still cash flow positive, though the cash flow is not as high as it was previously. To address this, Gabe suggests focusing on reducing debt and lowering the loan-to-value ratio (LVR) to become less reliant on banks and improve long-term cash flow. He also discusses the aggressive lending terms offered by new lenders in the HMO space, and how the big banks are likely to enter the market soon with more attractive rates and terms. Ultimately, Gabe emphasizes that paying down debt can significantly increase an investor's cash flow and allow their money to work harder for them.
Key points covered:
Interest rates have risen significantly, putting many investors underwater on their properties
While HMOs are still cash flow positive, the cash flow is not as high as it was previously.
Focusing on reducing debt and lowering the loan-to-value ratio (LVR) can help investors become less reliant on banks and improve their long-term cash flow.
New lenders in the HMO space are offering aggressive lending terms, but the big banks are likely to enter the market soon with more attractive rates and terms.
Paying down debt can significantly increase an investor's cash flow and allow their money to work harder for them.
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Disclaimer
Nothing on this channel should be considered tax, financial, investment or any kind of advice. Everyone should do their own due diligence as only a professional diagnosis of your specific situation can determine which strategies are right for your situation. Our goal is to frequently feature edgy and actionable value, thought leadership and property/investment strategies.
