We've explored the impact of the official cash rate (OCR) on lenders' interest rates and suggested some strategies for handling interest rate rises in part one and two of this series.
If you're investing in property, being prepared for increases is the first step, while refinancing or opting for a fixed-rate loan are other options worth considering.
So - just what does our final instalment of this three-part series have in store?
Tip 4: Raise rent
Asking rents increase over time - that's just a reality of the property market.
You've got to stay up to speed with such developments in order to ensure you're maximising your investment property's potential. Or perhaps you've got a growing portfolio, in which case it's important to understand the nuances of the market and raise properties' rents as is required.
Raising rent isn't simply a market reality, thought. It's also a strategy to keep up with interest rate increases. By lifting your asking rent, you can boost your cash flow and keep on track of your loan payments.
Tip 5: Develop an exit strategy
Having an exit strategy in place shouldn't be a luxury. Rather, it's absolutely essential!
One option is to sell your investment property or consolidate your portfolio. Of course, there are a few things to weigh up. You might do well out of capital gains, but is it worth holding onto the property a little longer and potentially do better further down the track?
This will depend entirely on your financial position and future plans.
Some commentators suggest that if inflation outpaces a property's capital growth, it's probably a dud. In such an instance, selling up may be the better option for your situation.
Obtain a property investment plan today to discover your investment opportunities and potential for financial independence. And be sure to work closely with the experts to develop solid strategies to overcome future interest rises!
This information is provided by DPN Pty Ltd ABN: 94 630 700 186, Australian Credit Licence 514759. DPN Finance Pty Ltd is an authorised credit representative 504129 and a related entity of DPN Pty Ltd. Casa Capace Operations Pty Ltd ABN: 79 624 981 184, NDIS provider Number 4050038018 trading as Casa Capace.