Interest rates! It’s a constant love-hate relationship. If you're saving for your first home or you have already invested in a property in Australia, you are probably more than aware of the potential risk for rising interest rates and the great financial impact it can have on your property (and your bank account!). The potential spike in interest rates are at high odds, especially when we are in such a fluctuating economy. Investment properties don’t just come with simple low fixed costs, it’s the added small to medium sized costs that can add up and impact your ability to sustain and afford a property. From the cost of the real estate agent, the property manager to the maintenance services, the list becomes long and creates a feeling of never ending expenses.
Its scary to think that a one percent increase in the interest rates for property has the potential to result in thousands and thousands of added dollars spent on either one or many of your properties. It leaves you feeling related to any increase in interest rates as if you’ve flushed that hard earned extra money right down the toilet, watching it quickly disappear. It is key to reduce those unnecessary expenses, in case of the potential increase in interest rates. Its better to be safe than sorry.
The DIY within us
Making improvements and renovating a property is costly with the estimated price easily blowing out the budget, if you blink you’d miss it happening. Understanding what improvements can be done yourself is important; it can save you big bucks when you're tightening your own rental property belt. Don’t underestimate the power a good hammer and a bit of hard sweat and tears can do.
Real Estate agents and property managers are expensive, especially in terms of their fees and charges due to advertising, inspection fees and the numerous added costs to manage your property. Don’t allow a pending rise in interest rates wake you up to the large outrageous fees agents are charging you. Take back the control of your property.
So take a minute and consider life with higher than average interest rates, what impact would it have on you and your investments?