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BLOG: How we managed to save $18k through our portfolio

08 FEB 2019 • By Phillip Tarrant • 3 min read • Finance

The Smart Property Investment portfolio is in a bit of a holding pattern. We’re just waiting, so we had the time to check our mortgages. With some moves from variable to fixed rates, we ended up finding savings of $18,000. Here’s what happened.

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In this period where we’re not buying property, we’re spending quality time and considerable energy and efforts just looking at how we can improve the cash flow position of our portfolio, which spans from Sydney, Brisbane and Melbourne – you can take a look here. It’s a very diversified portfolio.

So, we went through a period of reflection late last year in conjunction with our mortgage broker, Ross LeQuesne; he’s done all our mortgages and assessed our interest rates, where they sit, how they’re falling. In doing so, we identified some potential savings we could undertake by shifting from variable rate loans into interest-only fixed rates.

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We sat down and we looked at the portfolio and worked out what we’re not going to touch, what we might touch in the future, whether we need some capacity or flexibility, and we’ve fixed a lot of the rates associated with some of these properties in three-year terms.

For example, we have a couple of units in Mount Druitt, and we shifted from interest-only variable to fixed, and they went from 4.79 per cent to 4.25 per cent; 5.29 per cent down to 4.29 per cent; and 4.79 per cent to 4.29 per cent.

 
 

With our property out in Cambridge Park, we shifted that down from 4.34 per cent to 4.02 per cent, and with a large property we have up in Mount Ku-Ring-Gai, we shifted that one down to 4.19 per cent from 5.35 per cent.

Then there’s the one in Kingston, Queensland, which went from in the range of 5.8 per cent to 6 per cent down to 4.34 per cent fixed. Another property in Lawton shaved the rate from 4.86 per cent to 4.34 per cent. Some other properties up that way went from 5.31 per cent to 4.19 per cent.

When we started this process, we wanted to find savings of between $15,000 to $20,000 a year, and we ended up with about $18,000.

It was hard work to get to this point, though; the exercise sucks. It’s a pain in the a**e and there’s so much information required, so I actually had to give a fair bit of effort and attention to it.

I was, thankfully, supported by other people in this business who helped me out, and in particular our mortgage broker Ross, who did all the heavy lifting on it.

Anyway, I’m pretty happy with it. $18,000, $15,000, $20,000 whatever it is, it’s a lot of money. So, I much prefer doing the hard yards now to deliver greater positivity to our cash flow position going forward.

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Phillip Tarrant

Phillip Tarrant

AUTHOR

Phillip Tarrant is executive editor – Real Estate at Momentum Media. He is also an investor with a large property portfolio.

He leads the content strategy and corporate growth for a range of market and business intelligence platforms at Momentum Media, including Smart Property Investment – the authoritative voice for Australia’s property investment community.

As head of the Smart Property Investment Podcast Network, he also steers the largest network of property podcasts in Australia, which collectively generates nearly 2 million downloads every year.

There are over 2.6 million investment properties in Australia, with over 2.1 million Australians (or around 8 per cent of all Australians) owning one or more investment properties. A vibrant and critical sector for creating wealth for Australians, the property investment sector is expected to remain a pillar to the national economy.

For nearing a decade, under Phillip’s stewardship Smart Property Investment has been informing and educating property investors on the tactics and strategies to create wealth through property.

Trusted by over 100,000 Australians each month as the turn-to independent resource for property market insights and information, the brand supports the mantra of "for investors", by investors’, drawing on the unique position that Phillip and Smart Property Investment share, warts and all, its own journey through property.

The Smart Property Investment Show, part of the Smart Property Investment Podcast Network, is one of Australia’s most popular podcasts, forming the keystone of an integrated digital platform delivering daily property updates, live broadcasting, insights, opinion and data to property investors across the nation.

Underpinned by a content team universally recognised for their knowledge of the sector and approach for clear and concise communication, Smart Property Investment has become a central part of Australia’s property community.

About Momentum Media

Momentum Media is a leading media and market intelligence company, and the business behind Smart Property Investment, REB and RPM.

Guided by a strong sense of purpose to support our communities, Momentum Media has forged its place as one of Australia’s most influential media and professional development businesses.

We have been equipping Australia’s corporate, investor and SME sectors with market and business intelligence for over a decade.

Across an integrated business supported by digital, events, broadcast, research, print and social platforms, we are guided by the purpose: Be Better informed.

This passion for informing, educating and inspiring drives us to build more engaged communities, delivering greater leadership to the markets we connect to and forging closer relationships with our audiences.

Being at the forefront of media innovation, backed by a pioneering spirit, has been central to Momentum Media’s growth.

We’re an evolving, forward-thinking business based on a purpose that supports corporate Australia and the markets critical to our nation’s economic prosperity and security. We’re also focused on delivering exceptional value to our commercial partners.

We adapt on a daily basis to rapidly changing market places; we’re a fluid media business, unanchored to any particular technology, channel or tone of communication.

With a reach spanning nearly 2 million professionals, high-net-worth individuals and SME business owners, we’re connected to the rapidly changing preferences and attitudes of our communities – and we’re making a positive contribution for our communities to thrive.

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