At a time when applying for a loan means every crevice of your finances will be assessed, keeping track of your expenses has never been more essential to securing a property. But how do you start? – An expert shares how setting goals can direct the way forward.
Whether there’s a handful of properties to your portfolio or you’ve recently secured your first, knowing the most opportune angle at which you will approach your investments ultimately relies on being confident of your strategy and where you want to be standing later on in your journey – say, in retirement, when you want to enjoy a particular kind of lifestyle that’s unshackled from the 9-to-5 and open to more spontaneity.
But how do you organise today’s finances and start cultivating your savings?
In the latest Your Investment Property YIP Talk podcast, Michael Beresford, director of investment services, OpenCorp, sits down with host and magazine editor Sarah Megginson, to discuss the importance of budgeting and how to approach “goal setting” in property investing – which he says only “gets easier over time”.
“Be clear on what financial security and flexibility would mean for you, then that’s a good place to start because then you can understand that and effectively feed into [it],” Beresford says.
In the podcast, the director cautions investors away from seeking out the “smoking gun to invest in 2020”.
“What successful property investment is about is investing when you can and taking as much action as is possible at any point in time, which basically fits in with your cash flow and your goals and all of those parameters as well,” Beresford explains.
Leveraging off debt is essential for the most experienced of investors who are wanting to continue expanding their asset base, as well as for those who are looking to use the equity of their first property purchase so that they can launch themselves into their next investment. But even ‘good’ debt has become increasingly difficult to obtain due to the changed lending regulations.
As Beresford shares: “So much of the emphasis has been around the lending and the finance because unless you’ve got bundles of cash and you can buy properties outright, everyone needs a bank – right?”
“That’s why it’s such a key topic that we focus on, and why we’re forever putting in time and effort to understand and help clients navigate that kind of landscape to be able to find where they can borrow money from a lender,” he says.
To help investors along the property route, Beresford spotlights how they should be approaching their ‘borrowing capacity’, and if they happen to have a substantial backing of it, not to feel as though they need to inject all of it into a single property to be able to attain an advantageous return.
“What [understanding your borrowing capacity] does mean is that you know what you have borrowing capacity for so that you are acquiring investments that obviously work within those constraints of your personal situation,” Beresford advises.
“What is essential is that you pick the strategy that will deliver the results that [you want].”
To gain more insight on Michael Beresford’s tips for creating wealth through goal-setting and strategic property investing, tune into the latest YIP Talk podcast.