Day by day Indians are choosing to build wealth through the property sector. People’s goals might differ from short term goals seeking capital growth or long term investment where the strategy is to buy and hold on to it. But there is no doubt regarding the fact that property investment is one of the safest modes of investment available in the market.
Finance is also a very important aspect when it comes to selecting the correct property that serves your needs. In some situations, it even becomes the most important factor as the amount of property in which you invest is directly related to the amount of money you will be able to borrow. If you do not plan your finances ahead of time, you will be imposing restrictions on your borrowing ability and deter yourself from creating a sound and promising investment portfolio.
Hence before investing in plots in Mannivakkam, take a few minutes to read through some expert advice. We have put together some amazing finance tips for property investment that will help achieve your goals seamlessly.
Let’s jump right in!
Decrease the limit on your credit cards and cancel any credit card that you are no longer using
You will be surprised to know how much more money you can borrow once you reduce the limits of your credit cards. Hence, you might want to cancel whichever credit card you are not using. Every bank and money lending institution takes into serious consideration the amount of money you can borrow through your credit card once you apply for a property loan.
Pay off personal debts
According to finance experts, one of the golden rules of investment involves the consolidation of all kinds of personal debts before you consider any investment. While the Mannivakkam square feet rate has been steadily increasing for the past couple of years, you need to consolidate your debts before you begin investing. Understand this- if you have a debt, you are not only supposed to clear the principal amount, but also pay the rate of interest. In this way, you are already liable to pay a chunk of money from what you have at hand. In such cases, an additional investment might not be a good option. If you have extra money, it is better to use that in paying off all the debts first.
Make use of different lenders to finance your investment
Too often people make the mistake of depending on one lender to finance their investment in properties. They consider their loyalty and convenience to the particular lender when borrowing money. But this is a big mistake that experts want you to avoid. Whether you are considering investing in plots in Mannivakkam or a house for sale in Mannivakkam, by borrowing from one lender, you limit the amount you can finance. It also increases the risk as this one lender will fund your entire investment by checking all your properties as a whole unit rather than individual investments. Instead, diversify your finances by using different lenders. In this way, you can find the best deals, boost your borrowing limit and have complete control over your assets.
Refrain from cross-collateralized securities
Cross-collateralized securities means providing one lender with the security of more than one property. Research shows that this can turn out to be quite problematic when the prices rise and you consider releasing some of your recent equity. When one lender has your assets as security, he might not let you refinance your property. You will lose out on many amazing deals by cross-collateralising your properties. Moreover, if a situation arises when you need to sell a part of your investment portfolio in order to solve any financial problem, your lender will have the upper hand. This might mean that you will be losing out on profit and good prices when selling plots in Mannivakkam.
Have a solid strategy
If you truly want to succeed as an investor, you need to have a detailed business plan in place. To grow your property portfolio, you need to consult with financial advisors as they will help you achieve a healthy flow of cash. You will also learn how to serve other costs.
Keep a close eye on your security
You do not want to restrict your investment potential by allowing lenders to have too much control over your security. Lenders on the other hand will always tell you that there is no such thing called too much security. However, have a sound plan in place that allows you to annually review your securities. Re-value the, with the bank every time there is an increase of about 7%.
Line of credit or redraw facility
While it is important to focus on the positive, you should always be prepared for rainy days. Unfortunately, not many investors take this advice seriously. They do not ensure any protection for their cash flow. Set up a cash reserve from the beginning by creating a line of credit or redraw facility. This will act as a buffer or cushion for you and provide you with peace of mind.
Bottom Line
Real estate is a promising sector that provides investors with a lot of opportunities to grow as an investor. There are many upcoming projects all over the country that can help you broaden and diversify your investment portfolio. But in order to be a successful investor, you need to take care of your finances. Plan ahead of time and work with professionals before you take the leap.
