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Ben Kingsley Blog post by Ben Kingsley

Finance Structuring for Investing

Choosing the correct Property is crucial to your future wealth when it comes to property investing. The focus of the investor is obviously on finding the best property and paying the right price. However, just as crucial in your property investing business is making sure that the structure of lending is correct for your portfolio now and for the future.

Once the property is purchased often the investor’s focus shifts to getting the lowest interest rate, or for products that have features that are not really required, or a loan that does not have the required features. Just like the research that is done when choosing the investment property the same goes for choosing the best financing structure.

Understand your financial goals

It is very important that you have your investment goals clear. This is the first stage in making sure that the lending products you are choosing will be able to grow with you as you get closer to your investment goals. Having the flexibility to move money around via a line of credit or setting up an offset account to allow a property to be used more tax effectively in the future could be crucial decisions now that save you money in the long term

Understand your Numbers

It is vital that as part of your investment goals, you have a detailed understanding of your budget. This will allow you to make an informed decision as to whether you have the capacity to meet the loan repayments. This exercise will then dictate the type of property you can afford as well as help to focus on the correct loan product for your portfolio

Understand the various features of the loan

Now that you have your investment goals detailed and have a good understanding of your budget, the features of the loan will now become more important. A structure/loan that allows flexibility of repayments, ability to capitalize interest repayments, the option to split a loan into different amounts with different products, paying an annual fee compared to an application fee become important considerations. These are just a few examples of the features you need to be thinking about.

Engage the services of a specialist

Choosing to work with someone who has good understanding of the available products is crucial. Further to this, it is also very important that this person understands your investment goals so they are better placed to advise you on the product and loan structure that best suits your individual situation. A certain product that works for one investor’s situation may not be appropriate for the next investor.

Make an informed, educated decision

Now that you have all the facts in front of you, you should feel confident that you will be able to make a decision that will allow you choose a loan that is going to be the best for your current situation as well as going forward with your investment strategy and it does not always come down to the cheapest interest rate!

 

If you would like to have a no obligation, free discussion on your current loan structure then please contact Empower Wealth and one of our Professional Strategists will be able to evaluate your current lending structure and make any recommendations as to the possible restructuring of your loan portfolio

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