News

How a review on your finance structure can ease the financial burden of being an investor.

There have been a huge number of changes to banking policies over the last 18 months as a result of the banking royal commission.  A number of these changes have affected property investors - particularly those who seek to have their investment property/s run as 'cash neutral' as possible (this means that the rent you receive covers as much of the loan repayments as possible). 

Lots of investors are finding it difficult to re-finance their loans with their existing provider when their Interest Only period expires.  At this time the loan converts to 'Principal and Interest' and the lender will expect you to start paying back principal as well as interest.

One our clients at Trove (who is happy for us to share the details of his story, but understandably not his name) recently had his interest only term expire.   His loan had reverted to Principal and Interest and the repayments were increasing from $1,260 to $1,960 per month. With a rental return of $1,580 this meant a previously cash neutral property was now going to cost the client over $400 per month.

Our client had approached their current lender, but they were unable to assist with a further Interest Only term.  Considering selling his investment property due to the out of pocket cost each month, we suggested he get in touch with one of the awesome finance brokers we know for a review before embarking on the sale process.

Linda Macnab from Macnab Finance was able to secure our client another 5-year Interest Only term PLUS they reduced the interest rate from 4.19% to 3.64% saving them $820/mth and again making the repayments less than the rental income.  Now our client can keep the property for at least another 5 years and hopefully reap the rewards of the increased value of the house during this time.  

Regular reviews on your finance to ensure you are on the best rates and structure for your situation and investment goals is really important.  Having an experienced competent broker who genuinely wants to provide the best financial solution goes a long way to helping achieve your investment and financial goals.

Here at Trove we want to help our clients keep their investment properties.  If your investment property is becoming a financial burden, please contact us.  We would love to put you in touch with our awesome network of brokers who are experienced and actually care about the solutions and products they provide.  Please know that at Trove we don't accept any referral payments, trailing payments or any such payment from brokers - we simply want to help our clients stay investors (and keep our great customers!).  For more information, call Amee Thompson or Rebecca Day on  8386 1555.