Why your property investment strategy is flawed?
You’ve heard the ads and sat through a few dreary seminars. Now you’ve got a handle on the same ‘strategies’ regurgitated with a slightly different twist by various kooky salespeople.
Like this one:
- Put your home on interest only to free up cash flow
- Get yourself into massive amounts of debt to buy another couple of properties
- Cross your fingers the market continues to head north
- Cross your fingers the properties are always tenanted
- Cross your fingers interest rates don’t rise
- In 20 years, sell a property or two and hopefully clear your mortgage
Sounds like a winner.
But you know what? This is way too risky for anyone wanting to be rolling in clover (or even wanting a decent night’s sleep!).
Here’s what stinks about this strategy, and the spruikers who encourage it: it isn’t a strategy, it’s a gamble; you’re fattening the pockets of the bank by paying them way more in interest than you should; AND you’re out of control financially and setting yourself up for a meltdown should the favourable tides you’re hoping to lift your boat suddenly turn.
What would happen to you should interest rates rise, which they will? Scary.
People can end up paying triple the price of their home by being sucked into this flawed strategy because a lot of the growth that you accumulate in your investment properties can be negated by the wastage of your own after-tax cash in paying the maximum amount of (non-deductible) interest on your mortgage for years or even decades.
And here’s the gamble; for this to work, you need to somehow forecast that your after-tax gain across the investment properties you plan to sell is going to cover the mortgage which you have not focussed on for years and there’s a good chance that the mortgage has actually increased over the years to fund holidays, renovations, etc. We see it every day.
What you really end up owning is a huge amount of financial stress.
Why would you want to get so financially out of control, where the bank will always win?
Years sitting at kitchen tables talking to mums and dads has taught us one really big lesson; they’re a pretty conservative bunch, and they like their lives fairly simple.
So let’s change the channel. Here’s the Clover Partners idea:
- You’ve got your home, so let’s get rid of your mortgage quickly
- Create equity by paying off your principal ahead of time with a (suitable) redraw facility and some spending awareness
- Use a some of the equity in your home as a deposit on a solid investment property
- Clover Partners will get you on the absolute lowest interest rate available to you
- Pay off your home in half the time, effectively doubling the return on your investment property
We’ll get you set up on a straightforward plan that doesn’t bet on the property market going up.
You’ll pay off your home at lightspeed (compared to your existing set up) with the lowest interest rate and smart cash flow plan, denying the banks another opportunity to milk another client who only pays the minimum and refinances every 4 years.
We know property investment. With our help, we’ll turn it into a stress-free wealth generating vehicle.
Want to own multiple investment properties? Sure thing, but use our strategy to make a dent in your mortgage, then buy a second investment property. Believe me, you’ll be so much more relaxed.
You’re in full control. You’re creating equity. You’re keeping more of what you earn for your benefit by claiming the expenses of the investment property as a tax deduction.
You can sleep.
In less than 20 years, you could own your home an investment property or two in a stress-free, conservative way.
And what could be better than that?Want more insight? Give us a call on 1300 823 995 or touch base below