Review Your Property Investments GoalsGuy Ward
The number one thing to do this year is to write out your property investment plan.
In that plan, decide your financial goals, such as what your net worth will be at the end of 2011 and how much money you’ll need to retire. Your goals may be weekly,
monthly or for any period you like. It’s also important to decide what to do when you achieve your goals and what to do if you don’t. For example, if you purchase that
property you were after, celebrate it! If something happens and you didn’t end up purchasing it, decide what you’ll do then.
Mark Carney, Governor of the Bank of Canada, has warned us that a financial squeeze is coming. Despite his dire warnings, we Canadians are still borrowing and taking advantage of low interest rates, albeit at a slower pace. So, in the spirit of the New Year and all the goal-setting exercises that go along with turning 2011, here are some small steps we can take to reduce that debt, compliments of Rob Carrick of the Globe and Mail. Examine Your Mortgage Studies have shown that variable-rate mortgages are the better choice (meaning you pay less interest) most of the time. Carrying a floating-rate debt means you have lots of financial flexibility, which has to be weighed against the risk of costs increasing. History has shown that variable-rate mortgages are best especially over the past 15 years when interest rates have been in decline. Variable-rate mortgages get cheaper as rates fall because they’re benchmarked to your lender’s prime rate.Today, the one certainty in the outlook is that interest rates can’t get significantly cheaper than they are today. But rates will most likely go up in the Spring. Each mortgagor’s situation is different so it’s always a good idea to consult with a mortgage broker to come up with the best solution.Use mortgage double-up payments the details differ depending on your lender, but many mortgages allow you to Review Your Property Investments Goals.. The number one thing to do this year is to write out your property investment plan. Re-evaluate your goals? Find a new property? Decide on a new strategy? Then set out a schedule to achieve those goals over the next three years, five years, seven years and ten years. Remember that your plan is dynamic, meaning it can and will change as your priorities change and because some of your investments may not work out the way you planned.
Look at the different investment strategies available to you and understand the types of properties you need to purchase. Then complete a cash flow projection. Any good real estate investment plan has a cash flow analysis. You’ll also have to decide on an exit strategy — when and how to liquidate your portfolio to get the maximum benefit according to you investment goals. Use the services of a good tax accountant, a good lawyer, a good mortgage broker and a good Realtor, who are all there to help you achieve success.
Guy Ward is a Mortgage Broker in Calgary, Alberta with TMG (The Mortgage Group Alberta).