Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
Investor Mindset
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated about 10 years ago on . Most recent reply

User Stats

4,456
Posts
4,295
Votes
Ben Leybovich
  • Rental Property Investor
  • Phoenix/Lima, Arizona/OH
4,295
Votes |
4,456
Posts

What is Bad Debt?

Ben Leybovich
  • Rental Property Investor
  • Phoenix/Lima, Arizona/OH
Posted

There's been a lot of discussion on the forums as it relates to differentiating bad debt from good.  The most common view on BP is that any debt which does not produce investment returns is bad debt.

I, for the most part, do not disagree.  However, there are caveats to this.  Before I state my definition, I'd like to take a pole.  Here we go - answer yes or no:

1. If you believe that so long as debt does not produce income it is Bad Debt - say YES.

2. If you believe that income-less debt could still be good debt - say NO.

What do you think?

Most Popular Reply

User Stats

5,659
Posts
1,833
Votes
Elizabeth Colegrove
  • Hanford, CA
1,833
Votes |
5,659
Posts
Elizabeth Colegrove
  • Hanford, CA
Replied

I consider bad debt to be debt that is consumer debt things that you cannot afford. 

On the other hand, I don't think leverage things you would buy anyways a bad thing. Time Value of Money is very true. So taking advantage of that with 0% or low interest rates are awesome. 

For example, Buying a car that you were going to buy anyways and using a 0% interest rate. Taking that downpayment money and investing it into a rental. Now you have another rental who's profit covers much of that car payment. In my mind great leverage. 

Loading replies...