How Owning Property Can Increase Your Financial Portfolio
As the old saying goes there is nothing better than investing in bricks and mortar. This is especially the case as it becomes increasingly difficult to obtain a stranglehold on the property ladder. In addition, if you are savvy enough and have the funds available you can have the chance to increase your collection dramatically. This is thanks to buy to let properties which are more and more popular for serious investors. Here you will find just some of the ways in which you can benefit from the property boom that will no doubt add to your assets.
Equity
The majority of financial experts and estate agents will inform you that the equity tied up in your investment portfolio is extremely valuable. In fact it can be used as a powerful tool in order to boost your collection as well as your overall wealth. So how is this made possible? If it used in the correct way, this particular equity will be able to;
- Assure the funds required in order to reach your property investment objectives.
- Increase accordingly on the condition that your investment property rises in value.
- Refinance your loan on the property so that you can have access to the augmented equity value. In turn this can be used as a deposit on the next asset you buy.
Current climate
Depending on the location of your property, the current trend is for increasing prices. Therefore, your investment will only rise in value as time goes on. With less supply and rising demand for properties, your investment will be even more prized so the longer you hang on to it the higher it may fetch when you put it on the market. You can then use the extra funds to inject it into the next abode or put up the rental rates so that you will have even more money to play with.
Refinancing
As soon as your property has increased through conditions above or repaying your mortgage extremely efficiently, there is the possibility to utilise the enlarge equity as collateral. This will ensure you can take advantage of even more lending from the banks. In order to do this it will usually involve;
- Refinancing your loan at its present figure which will in turn free up a certain amount of equity.
- Agreeing with the bank a particular loan to value percentage to suit both parties enabling them to retain a small equity stake as potential security.
Budget accordingly
Before you put pen to paper, and start your property empire, you should take into consideration how to create a relatively straightforward budget. You should allow for extra funding which should be set aside for expenses incurred in the long term. This could feature anything such as;
- Rises in interest levels.
- Renovations you decide to carry out on your properties.
- Any deficit when it comes to rent or any repayments.
Refurbishments
If you are stuck and the level of equity that you have cannot be released to secure another home for your burgeoning portfolio, there are other solutions. You can have the opportunity to inject a bit of cash into renovations which will of course increase the value on your current home. By using this particular equity to put in things such as spotlights, granite tops and contemporary furnishings you can really enhance your asset. In fact the longer you hold onto your asset the higher the potential rise in value.
As property becomes an ever popular asset not just for first time buyers but serious investors, the potential for expansion as well as business ventures is certainly on the up.
About the Author:
Established in 1861, Westpac is a reliable provider of financial solutions to those planning to apply for a home loan or mortgage in New Zealand.
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Category: Investing, Real Estate
