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Property Success NZ: making the right decisions

Amy Wilkes is an authorised financial adviser, residential property expert and the director of Wealth Works. Amy talks with property guru Wayne Maguire and Property Success NZ about removing the emotion from property. Plus she gives her tips on key considerations to take before climbing the property ladder!   

Check out a snippet of Property Success Episode One: making the right decisions. 

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W: Amy, from a financial planning perspective, what should people think about before purchasing a property
A: Before purchasing a property it's a really good idea to sit down and run through a budget.  Look at what your living and lifestyle expense are: How much disposable income do you have at the end? What are you going to do with that? 

Some people are quite comfortable putting all of their disposable income towards their mortgage or home. For others, lifestyle is more a priority. So, you really need to understand what sort of lifestyle you want - then tailor your home budget to suit. 

Action Tip: Write down a budget that clearly outlines your incomes verses expenses to find your disposable income.

W: Do you find that people are aware that there is a difference in their decision making process when they are purchasing a family home verses an investment property?   
A: Yes. For most of us, when we buy our first property, that was our home. So it's all emotionally driven. Whereas if we're buying investment property, we want to make money out of it. We need to be much more objective. We need to think about things like:

  • What areas are likely to grow the fastest over our time frame? 
  • What types and styles are going to suit the audience that we're going to rent to? 

It's very important to try to remove that emotion and think of it from a logical investment point of view. Your home and your investment are very hard things for people to differentiate between, but to get the best return it's very important that you can. 

Action Tip: Consult an expert. Not only will an authorised financial adviser have the expertise, they'll also act as your objective decision maker - helping you to remove the emotion. 

W: Interest rates right now are looking fantastic! What should people consider when they look at today's interest rates?   
A: We do need to remember that interest rates now are at an all time low, in the low fours! However, the long term interest rate is 7.5%. Also, keep in mind that five or six years ago we saw interest rates into the tens. I guess the message is to be prepared. If you're buying a property, it's a good idea to ask yourself: if the interest rates go up to 7.5%, are my repayments still going to be sustainable at that point? 

Action Tip: Stay safe. Use the Sorted Mortgage Repayment Calculator to work out your repayments would be at the long term average interest rate of 7.5%  

W: So, in some ways your almost holding the person back a little bit so that they are safer and in it for the long term? 
A: Absolutely! Property is a great long term investment. That's why I'd urge everyone to get some professional guidance before they enter any big decisions. 

W: Thanks Amy, great advice! That's really going to be one of our themes throughout Property Success NZ. Make sure you do it right the first time and don't leap in. Slow down and take caution throughout all those transactions in real estate.

Do you have some big decisions to make? Talk to the fully qualified and authorised team at Wealth Works. 
You’ll receive expert advice on how you can reach your financial goals. It’s just one way we can help Kiwi’s reach their dreams. 

Take the first step toward financial freedom today and book your free initial consultation.
Or phone 09 306 5820 for a chat about how we can help. 

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