Financial management and planning are important skills for property investors to have. The document provides several tips for property investors, including consolidating personal debt, using multiple lenders to increase borrowing ability and get the best deals, having a detailed business plan and strategy, regularly reviewing property values and security levels with lenders, maintaining a line of credit for cash flow protection, and considering interest-only vs principal-and-interest loan structures.

1. Financial Tips For Property
Investors

2. Financial management is an important skill for
budgeting and keeping afloat in this commission-driven
profession—especially during the initial phase of
launching your real estate business. As a new real estate
agent, you must deal with the unpredictability of when
and how much you earn. Here are finance tips for
property investing.

3. Consolidate Personal Debt
Always look for the opportunity
to consolidate any personal
loans which have a higher rate
of interest as these don’t only
cost you more in interest but
also impact on your borrowing
capacity. This includes any
interest on store cards from a
department store.

4. Use different lenders
Loyalty and convenience is the main reason people continue to
use the same lender to borrow money. Unfortunately this is
reducing the amount that you are able to borrow and increasing
your risk as one lender funding your whole portfolio results in
them assessing all your properties as a whole rather than
individually. By using different lenders you can always find the
best deal, increase your borrowing ability and stay control of
your assets.

6. Have a Plan or Strategy
No one plans to fail… they just fail to
plan! We’ve all heard that saying
before. Like any successful business,
an investor should prepare a detailed
business plan detailing the strategy to
grow their property portfolio, the
finance that is required to achieve this
and a cash flow analysis of how the
debt and other costs are to be
serviced.

7. Regularly Review Your Security
Giving too much security to lenders can greatly restrict
your investment potential. As far as lenders are
concerned there is never too much security. Review
your property values annually and have them re-
valued with the bank whenever there is a reasonable
increase of around 7%. Over time you will be able to
remove the security from your home or from one of
the investment properties.

9. Have a Line of Credit
Focus on the positive but be prepared
for the negatives! Unfortunately too
few investors take this advice. They
have done nothing to ensure that their
cash flow is protected if times get
tough. By having a cash reserve set up
properly from the start through a line
of credit or redraw facility you have
this buffer in place to give yourself
peace of mind.

10. Interest Only vs Principle and Interest
Structuring your investment loans with interest only increases your
borrowing capacity and still allows you in most case to pay down
the principle if you wish.