Long time readers of the Trilogy Report know that I like to provide friendly little reminders here and there, as to the fundamentals on which any sound investment should be based, be it residential real estate or some other type of asset class.
Whilst I might occasionally sound like a broken record with little else to do than repeat myself, there is a reason I like to talk about certain things a lot more than others.
This is particularly true in climates like the one we’re currently facing…politically and economically speaking. Times when a great deal of noise can drown out all reason and leave even the most seasoned investor feeling a tad uncertain.
So, with world events turning from ‘slightly odd’ to ‘downright whacky’ of late, and interest rate rises forecast for our future, there’s no time like the present to revisit 7 of my tried and true methods to ensure your financial portfolio is ‘safe as houses’.
The overall idea…prepare yourself for virtually anything, including those things you can never predict!
- Know your goals, know your plans and stick to them. When you have a clear path mapped out to your desired destination, you have far more chance of getting there without being derailed by any prevailing market noise.
- Invest in what you can afford, when you can afford it. Always remain in your financial comfort zone, allowing for contingencies like a change to your income and/or expenses. This requires disciplined forecasting, budgeting and bookkeeping. Which brings me to my next important point…
- Run your property and financial portfolios as you would a business. This means clearly thought through planning as to how you’ll build your portfolio during the active investment stage, along with what type of revenue it needs to generate to be successful.
- Analyse the risks as well as the rewards. It’s important to have confidence in the gains you stand to make as a property investor, but you also need to be mindful of the potential pitfalls, in order to better avoid falling into a financial hole.
- Always have a sufficient cashflow buffer at hand to cover you for at least three months of reduced income. Just in case. One of the most common problems investors experience in challenging economic times is maintaining sufficient cashflow to hang on to their asset base.
- Keep an eye on things. In your own backyard most importantly. While you need to be aware of world goings on when you’re involved in any type of market, you don’t have to immerse yourself in the doom-and-gloom reporting we frequently hear around real estate. The challenge is in constantly reviewing your own position, including loan structures. Which brings me to my final point…
- Don’t forget to look for opportunities. This includes any potential to refinance, or claim further depreciation and negative gearing benefits, to shore up that all-important additional cashflow wherever possible.
If you need assistance with the direction your property investment journey is heading, and some sound, expert guidance on your financial portfolio and structure, why not connect with the team here at Trilogy Funding?
Click here now to arrange a time to speak with one of our highly knowledgable brokers. We promise we won’t talk politics!
About the Author
Since 2008, David Thomas has built a business aimed at servicing the needs of property investors, owner occupiers and small business owners. David is recognised as one of the top 10 independent mortgage brokerages in the country, David and his team have settled almost billions of dollars worth of residential and investment loans over the last decade.
Known for his straightforward, relatable style, David believes by educating people about property funding; they fare better in the market. By sharing his expertise openly, some of the people he educates will likely become his clients. It's a win-win approach.
David Thomas is a credit representative (Representative Number 506153) of BLSSA Pty Ltd, ACN 117 651 760 (Australian Credit Licence 391237).