Time to re-evaluate your strategy
Investors should take the opportunity to conduct a comprehensive review of their portfolio and investment strategy as 2010 rolls on, Grow Consulting Group says.
Grow managing director Ayda Shabanzadeh says a new year provides a good prompt to re-evaluate your position and approach.
Shabanzadeh says while news on the economic front might be good, an air of uncertainty remains as interest rates rise and lenders continue to tighten credit policy, which are "both factors impacting the borrowing capacity of investors and their ability to access funds for further investment".
"It's important for investors to review their investment strategy, taking into account their personal situation, properties owned, property management organisation and mortgage structure, to ensure it's reflecting their current needs," she says.
"Even if you reviewed your situation and put a strategy into practice a year ago, it doesn't mean that it's doing you any favours today. In fact, as is often the case, it may very well be working against you."
Shabanzadeh says the most common change is that an investor may have different employment or family circumstances.
"If you've cut down on your working hours, your lifestyle may be suffering due to reduced affordability of your loan repayments. On the other hand, if you received a pay rise, you may be able to make higher repayments that will enable you to increase equity in your property," she says.
Other factors Shabanzadeh suggests investors re-examine include:
- whether their property manager is maximising the return on their investment;
- whether an alternate mortgage structure would suit them better; and
- whether their mortgage structure allows them to build their investment portfolio in due course.
