As we get back to business after the holiday season, January is a great time to re-evaluate your financial health and put into place strategies to knock over your property loans sooner.
Belinda Williamson, head of corporate affairs at national mortgage broker Mortgage Choice, shared some of her tips for investors to stay on top with Smart Property Investment.
1) The key action investors can take is to put any savings you make back into your mortgage – no matter how small.
“Small amounts can add up over the long term,” Ms Williamson said. “Put in any daily savings on a monthly basis, and then if you get any lump sums – for example a tax return, a work bonus or even cash as a Christmas gift, you can throw that into your mortgage too.”
Contributing an extra $40 per month, she said, can cut two years off your loan and save over $27,430 in interest payments over the life of the loan. For investors looking for cash flow positive portfolios, paying the loan off sooner should be a crucial part of the strategy, and for those with positive cash flow properties it may be worth putting extra money back into the loan.
2) Investors should also consider giving themselves a home loan 'health check', Ms Williamson advised. “Touch base with aspects such as your interest rate and loan structure. If you have a number of properties with a number of loans, you might be able to consolidate those.
“Evaluate your strategy, whether that is building equity, buying more properties or finding paths of tax minimisation by getting in touch with a tax advisor.”
3) Finally check on your equity – particularly if you have plans to build a larger portfolio. You may even want to order a valuation on your property or properties to see how much you may be able to pull out to use for your next investment.