16 July 2018
Be a smart investor and have a loan strategy.
You have saved away and have enough cash to consider purchasing property as an investment. Like any purchase, it is a huge one so having a strategy in place will keep you focused and ensure that you are doing as much due diligence as you can for a successful investment.
Not many successful investors became successful by accident – we recommend you start by seeking professional financial advice to really determine what your borrowing capacity is and how realistic your investment is.
Debt does not have to be scary, unless it is the wrong type of debt. In an ideal situation, you will want your debt to be productive and if you have planned how your cash flow will be affected, then you can have a clear understanding of how purchasing that next investment will affect your lifestyle. Productive debt in our eyes can be used as an advantage to buy an asset or generate income such as rental income.
Understanding your loan strategy
If you are looking to invest in multiple properties, we think it’s important to understand the short and long term perspective of property ownership. You have to think about how this next loan or investment is going to influence your life and your cash flow as well as what the situation might look like with your third or fourth investment. We say this as it can really make a difference in the type of property you purchase in the first place.
Think about how positively or negatively geared loans will affect what you purchase or how you live in the future. It may seem odd to be thinking so far in advance, but we think it is important to really understand your financial situation and also the results you would like to achieve as a property investor.
This is where we think it is important to be surround by the right advice. The right financial advisor for you will be able to help you plan the various scenarios to suit your end goal – after all everyone has different goals in their lives.