Monday Moneyvator: Make property investment your New Year’s resolution

Monday Moneyvator: Make property investment your New Year’s resolution

At the start of every year we’re all guilty of getting caught up in the “New Year, New Me” philosophy, focusing on losing weight and travelling more while our financial and property goals hardly get a mention.

This year I’m challenging you to ditch your new fad diet and globetrotting (for a while at least) and put your property investment goals at the forefront of your New Year’s resolution list.

Check out my picks of the top property resolutions in 2016 for inspiration and choose the ones that apply to you:

1. Reassess your investment loan

Perhaps you signed up to a loan a couple of years ago, however it’s no longer relevant to you now. That’s why I recommend in the New Year assessing your mortgage from top to bottom.

Say you have an investment loan with all the bells and whistles you could ever want but you don’t use these features (e.g redraw facility, offset account, revolving line of credit), you’re better off downgrading to a basic home loan and saving on hefty monthly service fees.

2. Fix your interest rate

A good move this year could be to take advantage of the historically low fixed rates by fixing at least a portion of your home loan. Not only will you be able to save on your loan repayments and know exactly how much you’re up for each month, you’ll have added security in case your lender decides to raise its rates on you.

Fixing your home loan is a longer-term commitment, so steer clear of ending the loan before the fixed term ends (usually 1 to 5 years) or you’ll be up for sky high break costs. Once the fixed rate ends, be prepared to hop online and shop around for a better deal in case the variable rate your loan will revert to isn’t as competitive as the interest rates you can get elsewhere.

3. Negotiate yourself a great rate

If you’ve haggled your way to a discount on a new washing machine or TV over the summer spending season, you can do the same with your home loan interest rate. The thought of haggling with your lender may be an uncomfortable one, but trust me; it’s way easier than you think.

When I went undercover last year I was able to shave up to 1.25% off the average standard variable rate from the big four banks. As well as an awesome rate cut, these lenders were prepared to offer me other incentives including $1,500 cash back.

The trick to cracking these higher rate discounts is never to settle for the advertised price and do your research about what rates you can get from other lenders. If you need a little help in haggling yourself a better deal, give me a call on 13 6696 (MOZO) or fill in your details here.

4. Renovate your investment property

Could your investment property do with a little sprucing up? Well the start of the year is the perfect time to put on your renovator’s hat.

Remember to choose renovations that will add value without breaking the bank. For instance, rather than adding a brand new $20,000 kitchen, you may only need to refurbish the area by adding new kitchen cabinetry and handles – It’s not only a cost effective way to add value but you may also be able to claim the costs come tax time.

If you’re hiring tradespeople or inspired by The Block to DIY, it’s always worthwhile getting several quotes to have an idea of what it’s going to cost to ensure you’re not overspending.

5. Get saving for your next investment

Realestate.com.au’s New Year’s resolution survey revealed one of the most popular property resolutions for 2016 was saving up to purchase an investment property. It’s a good reason to ditch the Friday takeaway and unused gym membership and commit yourself to saving a portion of your income every week.

Decide on an achievable savings goal, say 20-30% of your income, and you’ll be well on your way to getting a deposit together sooner. Plus, a savvy saving habit will put you in a better position with your lender especially when it comes to negotiating interest rates.

For more hints and tips for investing like a pro, head to my property section here.

Monday Moneyvator: Make property investment your New Year’s resolution was last modified: January 18, 2016 by Steve Jovcevski

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