Do you have a strategy for property?

In this week's video I ask the question: Do you have a strategy for property? That's because in a time of rising interest rates and talk of property crashes it could be so easy to react, to default think and to follow the herd... and that's not necessarily smart.

In the video I refer to my Property Masterclass which you can purchase for $49 HERE

If you want to receive my free weekly Mel's Money Musings direct to your inbox each Friday, make sure you sign up to receive them at the footer below.

Of course, if you know that you need more help check out the My Financial Adulting Plan via the link below. Next round starts May 2023.

Transcript

Hi, and welcome to Mel's Money Musings.

This week I ran a property masterclass where I shared my best strategies for buying a home, buying an investment property, and then what to do once you have that. What to do with your loans, how to set up debt, and most importantly, what debt you should be paying down and what debt maybe you wanna be getting a little bit comfortable with.

And yes, during a time of rising interest rates, it's still acceptable to have a measure of debt that you are comfortable with. But what I see during times when the media's talking a lot about property crashes, during times of rising interest rates, is that we run to a reactive approach. We run to default thinking, which is just stop investing, stop saving and pay down debt, or press pause. And it's really strange, isn't it? Because if I was going shopping for a house at the moment, a couple of years ago, or even a year ago, there would be lines going to your open house and then the auction would be full, and I would be stressed because of that.

Now people are stressed because there's no one there. It's easier to negotiate, you'll get a better deal, but it's that herd thinking of 'but everyone else isn't doing it, and I'm not sure therefore what I should be doing'.

It's the same with your mortgage. During times of rising interest rates, it can feel really safe just to pay it down quick. Yet, in last night's masterclass, I shared a couple of strategies which compared someone that just paid down their mortgage in 20 years versus someone that used exactly the same amount of money, but built up a buffer, paid extra, and invested. And then finally, someone that did everything in option two, but also in 10 years time, bought an investment property and just shared the difference of the three people's position in 20 years time.

Now, if this, if you listen to me and go, huh, I think I'm guilty of default thinking, I think I'm guilty of following the herd, do not feel bad about that. The media throw click bait headlines that are scaring us into acting a particular way. And also our financial literacy is declining globally. So we are being overwhelmed with information and we don't know what to do with it. Is it any wonder that we run to default thinking?

So what do I want you to do as a result of this? I want you to challenge your thinking. Maybe instead of paying off your mortgage quickly, you pay an extra 1%, as if the rate was 1% more, into an offset account and then invested the difference. Maybe you looked at your strategy for debt and what's good debt, what's bad debt, what's okay debt, and what should you be doing with each.

Maybe it's looking at your investment strategy. If you've got an investment property and a strategy for that. Maybe it's talking to a mortgage broker before you are ready to ask the question, what can I be doing? Can I be setting myself up for success to get into a loan? Or if I'm an interest only loan that I need to refinance soon, what do I need to know in a time of falling, dropping equity so that I make sure I'm able to refinance?

There were so many tips, strategies and more that I shared in that property masterclass, and I'm gonna drop the link below so that if you missed it, and if this has prompted you to go, gosh, I should have watched that, you can still buy the recording and access it live for 60 days. 

But no matter what, don't just succumb to default thinking. Don't just follow the herd. Have a strategy for property like you would with any of your investing, and then instead of being reactive, follow that through.