Protect your investment
23rd January 2018 posted in Hunters News
The worst situation for a property investor is when the property costs you money on a monthly basis, you cannot continue to fund it and are forced to sell.
Your mortgage broker should have taken steps to prepare you for potential mortgage rate rises and rental income falls, but there are ways you can protect your investment, too.
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Set aside a contingency fund of at least 1%-1.5% of the property’s value to cover void periods, emergency maintenance and increased costs. |
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Ensure you have adequate insurance cover against damage to the property by tenants, or in case they stop paying rent and you have to carry out legal proceedings. |
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Engage a good financial advisor/wealth manager to support you through financial bad times as well as good. |
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Ensure if you or a member of your family become ill or die, your investments can still be funded. What if you lose your job? What if you have negative returns or negative equity? Could you still cope financially if things go wrong? |
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“A contingency fund is essential for landlords. By working closely with Hunters, you can minimise void periods but all properties need money spending on them at some point and, unfortunately, we cannot shield you from changes in life circumstances. But with a contingency fund – and good insurance – you will be prepared for any eventuality.”