Every successful property investor knows that you can’t get far without finance. Working out your own appetite for risk is the first big step.
Then it’s about leveraging – the ability to use ‘other people’s money’ is a major reason that property investment is such a good way to grow your wealth. Deciding how much you feel comfortable borrowing, and then finding a way to secure that finance, is one of the big decisions you need to make as an investor.
A survey recently found that Kiwis with large mortgage debts don’t have lower financial wellbeing scores. That backs up what we’ve always found: if you understand your net worth and how your debts are working for you, it’s less stressful than a small debt that you ignore in the hope it will go away on its own.
Some of our clients can’t sleep at night with an LVR over 30%, while others sleep soundly with debt up to 90% of the value of their portfolios. If you have been looking to take on more debt, it’s been tough this year, but a good mortgage advisor will be able to help you tailor your loan application and submit it to the lender who’s the best fit for you.
Currently, investor lending makes up 22% of new lending, much lower than the 34% we saw in mid-2015. Loan-to-value restrictions are still dragging investors down, but for those of you who are still in the market, the banks do want to lend to those in a strong position. This gives you an advantage in the market – this is a great time to have existing equity. If you’re considering your next move, Impression clients have access to financial advisors, so talk to one of our team and we might be able to set you up with a meeting.