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4 Steps To Property Investing That You Need To Consider.

Property investment is a popular way to increase a person’s wealth and secure their financial future. But changes in interest rates, fluctuations in supply and demand, and even emotional decision-making processes can make the decision to invest in property a difficult one.

How an investor manages their investment ultimately determines whether or not they will reach their financial goals. Below are some things to consider before taking the plunge into property investing.

  • Establish What You Want To Get Out Of It

If you don’t know what you want to achieve, then you will never get anywhere with property investing. You need to be specific about what you want to achieve, how much money you want to make and how long you want to spend trying to get to that goal.

  • Speak To A Mortgage Broker

For beginner investors, a well-informed mortgage broker can be invaluable. Having access to a range of mortgage and property information means they can help you calculate how much you can borrow and provide advice on securing a loan.

  • Know How Much Risk You Can Tolerate

This is crucial to deciding what kind of investment strategy will suit you. You can self-assess your risk profile by analysing how many years remain until you retire, if you have any extra income or if you have some kind of buffer, like a savings stash, you could access in worst-case scenarios.

  • Learn The Investment Jargon

Spending the time to understand the language and nature of the property market will definitely help you in the long run. Educating yourself on property investing is also a lot easier today, with information and data available on the internet, in books and in magazines.

If you’re someone who often finds it difficult to make large lump sum payments for goods or services, you may want to consider looking into “Buy Now Pay Later” services.

Buy now pay later essentially means that, rather than paying in a full lump sum payment for a product or services rendered, there may be an option to pay through instalments of a certain amount over a set period to make the sum of the full amount in total. This method should allow you to pay in full for the product or service without overly straining your finances – you pay back what you can, as agreed upon when you begin the buy now pay later service.

Some popular buy now pay later services include Afterpay, Zip Pay, Brightepay, and some credit card networks such as  Mastercard and Visa, can offer buy now pay later arrangements.

Though it can be a convenient, immediate solution, it may be challenging to juggle the necessary repayments with other financial commitments. It’s not always the most appropriate method for people, and you should bear in mind your situation and ability in paying back the amounts. 

Before you sign up, keep in mind: 

  • It becomes easier to overspend with buy now pay later services, so know your limits on what you can and can’t afford.
  • You will be charged fees and costs to use the service, which can add up to a princely sum in and of itself.
  • Keeping track of your payments can be tricky if you’ve signed up for multiple services.
  • It could affect your loan applications for a car or mortgage as lenders consider buy now pay later spending just as much as your credit score.
  • Late repayments can appear on your credit report, which affects your ability to borrow money in the future.
  • Layby can be a cheaper alternative to buy now pay later, with no account-keeping or late fees to consider

If you are someone who could make use of BNPL services, you may wish to:

  • Ensure that when using the BNPL service, you stick to a set limit on what you spend so that you can comfortably pay it back later. 
  • Aim only to have one BNPL account at a time to manage payments through, rather than confuse yourself with multiple payments across different providers.
  • Always budget for bills, loan payments and BNPL payments, and 
  • Rather than use your credit card for payments to your BNPL account, consider linking to your debit account instead.

If you would like assistance in planning your financial future, help in managing your budget or some friendly advice, see us for a chat about what we can do for you.

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John Briggs

Jane Noller has been my accountant for the last 15 plus years. I can testify to Jane’s professionalism and expeditious manner in dealing with the day to day issues that surrounds our business accounting.

John Briggs

Registered Building Certifier