How Do You Protect Yourself and Your Equity At All Times?
My main goal I have for my clients is to help them build a successful property portfolio and improve their cashflow position. Now I do realise that you may feel you need a certain mortgage repayment plan over the next three years, and fixing in interest rates right now is very tempting – as you then know your repayments and can stick to a set budget right?
The problem with fixing your loans is – if you are wishing to access your equity quickly, or be released from your loans to keep investing in property – you could be facing thousands of dollars of fees to break your fixed rate mortgage…….especially if interest rates go down, which there is current talk of.
How does it affect you if you do rush out and fix your rates? Well here’s an example; I had a client in Perth a couple of years ago who had three investment properties and he had gone out and fixed all his rates at 8%. Then interest rates went down and property prices went up, and he had made a little bit of money which he wanted to access. However it cost him $55,000 to discharge his mortgage to get his equity out! Could that happen to you? Before you rush out and do anything, firstly come and see us at our next event.
Find out more about interest rates, and how to structure your finances in the most astute way at our next Property Investor Night.
A Common Scenario
I had some clients in Melbourne who were trying to build a property portfolio for all the right reasons. They had four properties with which they wanted to use to grow wealth and improve their lifestyle; however their loan structures were all wrong and they had no cashflow. Their whole reason for building this portfolio was so they could live a better life. Yet, the sad thing was they were hurting so badly financially, they hadn’t even been on a family holiday in 5 years!
The Solution: We restructured their finances to include a buffer; we released their equity from their properties, so they were not living in the red and they did get that holiday. The fact is even if you lose your job or something unplanned happens to you, we help create you a buffer from the start, so your lending structure can allow you two years to sort yourself out.How Does a Buffer Work?
Thinking long term with your finance to include a buffer is critical because investing in property is a business. By keeping your big picture in mind and having a plan for your finance, you will be able to avoid unnecessary serviceability blocks which can slow you down or in some cases bring you to a complete stop.
Below you can see that I would leave a portion set aside for buffer and the rest would be left to reinvest. We go into much further detail into this in our Property Investor Nights so before you do anything ensure you get educated.
Any astute investor has a killer finance team behind them, and with your finance structured correctly you have an array of exciting investing possibilities and as a client of Positive Real Estate, our single aim is to assist you to make sure you are making the most astute finance decisions every step of the way!
Just like determining what type of property you need, the way you structure your finance has to be based on your personal situation and goals. There is no blanket answer. Staying up to date with the property and finance markets is essentialas they are continually shifting and changing. Yesterday’s rules and opportunities may no longer exist. This is where seeking an expert team like Positive Real Estate behind you and getting educated on your financial position is your first step towards success.
RECENT POSITIVE REAL ESTATE SUCCESS STORY
Jodie and Greg Bush are Lifetime Mentoring Clients of mine in the ACT and they just just recently appeared in API Magazine for making an $87K profit in just 12 weeks! When they joined I helped Jodie and Greg through this deal particularly with their finance structure, negotiating the deal with the agent and with step-by-step guidance through the renovation to ensure they didn’t overcapitalise - which helped them attain these fantastic results – however their amazing dedication, motivation and hard work I cannot detract from! READ THEIR STORY AND WATCH THE VIDEO ON HOW THEY DID IT HERE.
You too could be like Jodie and Greg – working with a Head Coach to attain HUGE success in property investing with a property expert. Click here to find out when our next Property Investor Night is and take some action now.
Love to hear your thoughts – or any stories on experiences you have had on this topic – better still come and say hi and meet the team at our next Property Investor Night – HELD ALL OVER AUSTRALIA. :)
Related Posts
Tags
Share This
Here you will find comprehensive updates on investing from around Australia with the Positive Real Estate coaches writing news articles about real estate investment on a regular basis.
These coaches help everyday people achieve their property goals, therefore they are on the front-line of the real estate market everyday. 