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Money tip #7 – property investment

Perhaps this is your first property purchase? Or maybe you’re considering adding another to your portfolio? Whatever the case, these property plays never go out of style.

1. Pay off the mortgage quickly

  • Hit the principal early
  • Pay fortnightly
  • Use mortgage offset
  • Save a bigger deposit
  • Pay loan fees upfront
  • Stick to a budget
  • Forgo minor luxuries
  • Make extra repayments
  • Pay your tax refund into the home loan
  • Monitor rates and shop around.

2. Shop around for the best loan possible

Lenders look at three main areas when they consider your loan application: your down payment, your debt-to-income ratio and your credit rating. Make sure you look at your financial figures, how much you can afford to borrow, and what kind of interest rate you can get.

3. Location, location, location!

Buy where there is value and where you will get capital growth, rather than where you want to live.

4. Plan for the best and the worst

It worries me that so many Australians go into the really important financial decision of buying the most expensive asset they will ever purchase without an objective analysis of what can go right or go wrong. Too many people take ‘advice’ from real estate agents, bankers and mortgage brokers who can be good at what they do but they’re not commissioned with the responsibility of making sure you’re totally up to making your payments and ensuring you meet all of the other goals that you might have.

5. Talk to the experts           

Seek out the advice of a reputable accountant or financial planner. They can alert you to any tax savings you didn’t know about or inform you of any savvy property tricks such as leveraging.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

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Published on: Thursday, December 29, 2011

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