A common question I receive is…” Should we invest here, there, a particular suburb or property type?”
Investing in property is a demonstrated path to long-term wealth, however you should consider it a medium to longer term type of investment, so you’ll want to make sure that you can afford to sustain your mortgage repayments over the long term….
Before any underlying property investing strategy is formed you must understand with clear certainty your investing affordability. You must understand what you can afford in terms of cash flow based on interest only repayments OR principal and interest repayments. Are you using a negative gearing strategy, neutrally geared or positive cash flow outcomes? You must understand the sensitivity of your affordability ie what happens if interest rates increase, what happens if i lose a tenant, or lose partial income from your main sources of cash flow or worst of all a combination of them all. A specific service we provide in our Free Strategy sessions is to formulate the affordability piece into the overall plan . Affordability must include the what if’s and you and you alone based on your risk appetite will determine what that affordability level looks like.
Once you understand your affordability you can commence to add pricing, product location and property type to your strategy plan. You will not want to have to sell your investment property until you are good and ready to, ensuring you have full control over your portfolio and not let the market have full control.
By completing our Free Strategy session you can be assured you have considered one of, if not the most important component to successful property investing. Long term affordability will drive sustainability, Sustainability in property investing will help deliver the desired outcomes whatever the strategy Passive or Active Investing
Good Luck for the Future!