Organising finance is as important as purchasing the property.
In many countries, obtaining finance to purchase properties can be difficult. The stringent lending criteria of the banks, including steep deposit requirements, as well as affordability assessments continues to make it difficult for buyers to obtain home loans to finance property sales. However, without finance building a property portfolio is extremely difficult unless you have access to a lot of cash.
Put simply: If you can’t get more finance you can’t buy more properties.
Smart investors understand the importance of having financial buffers in place and use an investment savvy finance brokers to help them through the maze of different lenders. Understanding how to structure you finances and funding your loans is just as important as finding that ideal property
Investors must purchase “investment grade” properties to ensure their borrowing capacity is being optimally utilised.
What makes a good investment?
The things to look for in any investment (including property) are:
- strong, stable rates of capital appreciation;
- steady cash flow;
- liquidity – the ability to take my money out by either selling or borrowing against my investment;
- easy management;
- a hedge against inflation; and
- good tax benefits.