Mortgage Interest Rates - 8/10/04

Even with reports of lower house prices and concern about higher interest rates, a consistent number of our landlords are still purchasing investment property.

What it means to you: In such a scenario, the cost of holding your property may rise while its value falls. Some landlords are using the following tactics to protect their investment:

Tactic 1 - Use your current portfolio to build a "war chest". Remortgage to release as much cash from your current portfolio and to use this money to purchase lower value properties if prices fall. There are still available properties on the market and with the well acknowledged shortage of suitable properties in certain areas you can still make a return.

Tactic 2 - But I'm not a professional landlord. Start thinking like one! Understand the rental market where you are considering investing and identify areas where the demand for particular properties will continue. .

Tactic 3 - Auctions: The last downturn in property values, saw a boom in residential auctions. It may make sense to get a feel of these now to know how to secure the best deals if there is a drop in value.

Written By Simon Johnson
Xbridge Decision Finance

<< Back to news