Most Australians today understand the overall benefits of investing in real estate.
With the right guidance and the right decisions, property offers a lot of long-term value for savvy investors. So, the old adage, don’t wait to buy real estate – buy real estate and wait, really does apply!
However, most people require a mortgage to be able to buy property – and like any other loan, it needs to be paid back. This can often have a limiting effect on your expendable income over the next few years, which is why the most common questions we get asked as real estate Buyers Agents are:
- Is my life going to change dramatically after I buy?
- How can I ensure I still have the lifestyle I want when I have a mortgage?
Despite all of the advantages, owning a home can become a burden if it takes up your entire income, leaving little left over for a comfortable lifestyle. But, don’t worry – there are ways to manage this effectively (which we will share with you below).
Is there life after investing in property?
Of course! Definitely.
You’re not the first and you won’t be the last to have a mortgage; and most of these people manage just fine.
It really comes down to your lifestyle expectations and your level of determination to pay off your debt.
Yes, a mortgage is likely to be your single biggest expense and it will be worth it in the long run, however we understand that you don’t want to live like a pauper too.
So, you have to find a balance that you’re most comfortable with.
To help you weigh up your mortgage commitments and your lifestyle expectations, here are some tips on how to maintain your lifestyle after investing in property
1. Determine your expectations
First and foremost, before you do anything, you need to check in with your financial and lifestyle goals.
Do you spend a lot currently, or do you stick to a strict budget? What are you willing to compromise? What budget do you need to live the life you want to?
Once you set these boundaries, you’ll be able to start making decisions on how to proceed and what you can borrow.
2. Don’t over-extend your finances
The key to avoiding mortgage stress and maintaining your pre-mortgage lifestyle is to ensure you don’t over-extend yourself with a huge loan.
Determine what your limits are upfront so you know that you’ll be able to manage your mortgage comfortably without it impacting you too much.
3. Examine your loan options
Different loans from different lenders offer varying deals, rates and conditions.
It’s important to ensure you look at all of your options to find the right mortgage for you. A professional mortgage broker can help you with this, as well as align your loan with your circumstances and goals.
Choose wisely, as this will have a big impact on how much your repayments are which will affect your financial situation (and ultimately your lifestyle).
4. Principal and Interest or Interest Only?
Again, it’s best to speak to a professional mortgage broker about this one. But to summarise, mortgage repayments are usually offered as either Principal and Interest or Interest Only.
Principal and Interest is where you pay a certain portion of your mortgage off with each repayment, as well as the interest on the loan. This means you’re required to make contributions to pay down your loan.
Interest Only is where you’re only required to pay the interest percentage on your loan. This will be less than the Principal and Interest option, however unless you’re making voluntary repayments, you’re never actually paying down your loan over time.
There are benefits to each and whichever you choose is up to you.
However, the sum you’re required to pay each month will need to be considered, as this impacts the amount of remaining expendable income you will have left to spend.
5. Build up a little bit of a buffer
Just to be on the safe side, you may want to have a little bit of extra cash in reserve whenever you can.
For example, if you have a bit of a leaner month, consider putting some away so that you can use it in the future for a larger expense such as a trip away or perhaps a car.
6. Budget for interest rate rises
Interest rates can change over time.
Australia has experienced record-breaking low interest rates over the last few years, but it’s important to not let this lull you into a false sense of security.
When selecting your mortgage amount, calculate what your repayments would be at a higher rate, so that you never have to compromise should they change in the future.
7. Select the ideal property
In the end, you are applying for a mortgage to purchase real estate that will offer you the most value.
Whether you live in it or you lease it out, your choice of property will have the greatest influence on your mortgage, your lifestyle and finances.
To help you make a well-informed decision, you can enlist the help of a property specialist with expertise and experience in finding the ideal investment property for you.
The real estate services of a quality buyer’s agent like Worth Property Investing can support you and help you achieve your investment goals without having to compromise your lifestyle.
How can Worth Property Investing help you buy an investment property?
At Worth Property Investing, we partner with you throughout your investment journey.
As your trusted licensed property buyer’s agents, our experienced team guides and supports your property investing education, so you can achieve your property goals sooner.
Worth Property Investing can help you find the right property to meet all your requirements when considering your next purchase. We use real facts, due diligence and solid research to locate the right investments, and we have a proven track record to help you succeed.
CLICK below to download our free TOP 10 PROPERTY INVESTMENT RULES e-book today
You’ll get all the essentials you need to understand the role solid research plays in achieving property success.
Don’t put it off any longer – contact Worth Property Investing today and start achieving your property investing dreams!