Pay debt or Invest, What would you do? - Property - Wazua

Welcome Guest

Search | Active Topics | Log In | Register

Wazua » Investor » Property » Pay debt or Invest, What would you do?

Pay debt or Invest, What would you do?

Options

Previous Topic · Next Topic

Larayna		#1 Posted : Sunday, January 10, 2016 3:20:14 AM
Rank: New-farer Joined: 1/10/2016 Posts: 15 Location: Machu Pichu		Hello Wazuans. Happy New Year good people. Please can someone out there advise. I have a mortgaged rental property that is servicing itself but there are some months that I have to top up. My Monthly repayments are 300k a month but the principal isnt shifting. Its currently at Kshs 13M, repaid @16% interest I now have an apportunity of borrowing £35,000 (Kshs 5.25M) at a very low interest (3 % APR) compared to the rates in Kenya. Before I sink further into debt, What advise can you give. Here are my contemplations:- 1. Take the loan and offset part of the mortgage.(Likely to save over Kshs 5M in interest payments alone. Sorry I just realised this whilst typing this thread) 2. Invest in more housing units as the Mortgaged property occupies half the plot with a targeted increase in rental income of 100k 3.Put up single rooms ( approximately 40) on a seperate 100x120 plot I have with a potential rental income of 120k. 4.Jump on the Bear and patiently wait to ride the raging Bull. 5. Use the property as collateral with another greedy Kenyan Bank and get screwed (Well this is what banks have been telling me, they want to buy off the debt then give me a a new loan facility to do more development.) Repayable at the same monthly amount. Meaning the Existing property will continue to service the debt, while the newly development property will generate income, which I can use to increase my monthly repayments and reduce loan term and repayable interest significantly. 6. Niwachane na Madeni. Wapi Maichblack , I know you're chuckling.
Back to top		Report Abusive \| Report SPAM
User Profile

Xymalos		#2 Posted : Sunday, January 10, 2016 6:16:50 AM
Rank: New-farer Joined: 2/14/2015 Posts: 97 Location: Kenya		Larayna wrote: Hello Wazuans. Happy New Year good people. Please can someone out there advise. I have a mortgaged rental property that is servicing itself but there are some months that I have to top up. My Monthly repayments are 300k a month but the principal isnt shifting. Its currently at Kshs 13M, repaid @16% interest I now have an apportunity of borrowing £35,000 (Kshs 5.25M) at a very low interest (3 % APR) compared to the rates in Kenya. Before I sink further into debt, What advise can you give. Here are my contemplations:- 1. Take the loan and offset part of the mortgage.(Likely to save over Kshs 5M in interest payments alone. Sorry I just realised this whilst typing this thread) 2. Invest in more housing units as the Mortgaged property occupies half the plot with a targeted increase in rental income of 100k 3.Put up single rooms ( approximately 40) on a seperate 100x120 plot I have with a potential rental income of 120k. 4.Jump on the Bear and patiently wait to ride the raging Bull. 5. Use the property as collateral with another greedy Kenyan Bank and get screwed (Well this is what banks have been telling me, they want to buy off the debt then give me a a new loan facility to do more development.) Repayable at the same monthly amount. Meaning the Existing property will continue to service the debt, while the newly development property will generate income, which I can use to increase my monthly repayments and reduce loan term and repayable interest significantly. 6. Niwachane na Madeni. Wapi Maichblack , I know you're chuckling. The least complicated way to make money is by paying down part of 13M since you claim that you can save 5M. Essentially you make 5M doing nothing. Why engage in constructions and tenants hustles yet you can make the same money hustle free - by just paying down the expensive 16% loan? Can all those constructions wait till you are finished paying existing loans? As you assess the benefits of more loans, remember to deduct the health costs associated with high stress and high blood pressure when you have to fork the payments from your pocket.
Back to top		Report Abusive \| Report SPAM
User Profile

obiero		#3 Posted : Sunday, January 10, 2016 8:15:02 AM
Rank: Elder Joined: 6/23/2009 Posts: 13,517 Location: nairobi		pay down the debt since that is of the devil, especially mortgages which in latin means slow death! HF 90,000 ABP 3.83; KQ 414,100 ABP 7.92; MTN 23,800 ABP 6.45
Back to top		WWW Report Abusive \| Report SPAM
User Profile

Boris Boyka		#4 Posted : Sunday, January 10, 2016 9:49:58 AM
Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here		obiero wrote: pay down the debt since that is of the devil, especially mortgages which in latin means slow death! Even companies and Nations take cheaper Loans to clear expensive loans in terms of rates. Hasten to clear that mortgage first! Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
Back to top		Report Abusive \| Report SPAM
User Profile

Aguytrying		#5 Posted : Sunday, January 10, 2016 11:46:43 AM
Rank: Elder Joined: 7/11/2010 Posts: 5,040		You need to reduce clear that debt. After which you can start you're next cycle of investment. If you use more debt to clear your existing debt, that will become your mode of operation and it will be hard to get out of the vicious cycle. The investor's chief problem - and even his worst enemy - is likely to be himself
Back to top		Report Abusive \| Report SPAM
User Profile

snipermnoma		#6 Posted : Sunday, January 10, 2016 12:05:10 PM
Rank: Member Joined: 1/3/2014 Posts: 257		Considering the current monthly revenue is mostly paying interest, go for option 1; take the loan and offset the mortgage. That way you will get closer to paying off the mortgage.
Back to top		Report Abusive \| Report SPAM
User Profile

Rongla		#7 Posted : Sunday, January 10, 2016 1:56:30 PM
Rank: Member Joined: 10/3/2008 Posts: 101		Xymalos wrote: Larayna wrote: Hello Wazuans. Happy New Year good people. Please can someone out there advise. I have a mortgaged rental property that is servicing itself but there are some months that I have to top up. My Monthly repayments are 300k a month but the principal isnt shifting. Its currently at Kshs 13M, repaid @16% interest I now have an apportunity of borrowing £35,000 (Kshs 5.25M) at a very low interest (3 % APR) compared to the rates in Kenya. Before I sink further into debt, What advise can you give. Here are my contemplations:- 1. Take the loan and offset part of the mortgage.(Likely to save over Kshs 5M in interest payments alone. Sorry I just realised this whilst typing this thread) 2. Invest in more housing units as the Mortgaged property occupies half the plot with a targeted increase in rental income of 100k 3.Put up single rooms ( approximately 40) on a seperate 100x120 plot I have with a potential rental income of 120k. 4.Jump on the Bear and patiently wait to ride the raging Bull. 5. Use the property as collateral with another greedy Kenyan Bank and get screwed (Well this is what banks have been telling me, they want to buy off the debt then give me a a new loan facility to do more development.) Repayable at the same monthly amount. Meaning the Existing property will continue to service the debt, while the newly development property will generate income, which I can use to increase my monthly repayments and reduce loan term and repayable interest significantly. 6. Niwachane na Madeni. Wapi Maichblack , I know you're chuckling. The least complicated way to make money is by paying down part of 13M since you claim that you can save 5M. Essentially you make 5M doing nothing. Why engage in constructions and tenants hustles yet you can make the same money hustle free - by just paying down the expensive 16% loan? Can all those constructions wait till you are finished paying existing loans? As you assess the benefits of more loans, remember to deduct the health costs associated with high stress and high blood pressure when you have to fork the payments from your pocket. Thank you.It has just dawned on me, out of the Kshs 3.6 annual repayments, Just under Kshs 1M goes towards the principal as the bank has front loaded the interest. Meaning a Kshs. 5m repayment will have essentially paid off 5 years of principal.
Back to top		Report Abusive \| Report SPAM
User Profile

Larayna		#8 Posted : Sunday, January 10, 2016 2:07:52 PM
Rank: New-farer Joined: 1/10/2016 Posts: 15 Location: Machu Pichu		Thank you for your unanimity, the first on Wazua . I will pay of the debt. Mortgage!!! Chunga maisha
Back to top		Report Abusive \| Report SPAM
User Profile

Users browsing this topic
Guest

Wazua » Investor » Property » Pay debt or Invest, What would you do?

Forum Jump

You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.

Watch this topic
Email this topic
Print this topic
RSS Feed

Normal
Threaded