Successful property investment in New Zealand is a combination of good investment practices and risk management. There is risk in any form of property investment and it’s important to understand these risks.
Typical Risk Scenarios in Property Investment
The usual causes of property investment risk are based on capital management:
Over-commitment of capital: One of the most common problems for investors is that debt and other investment-related costs outweigh returns. Over-commitment of capital means that property assets cannot support debt. This leads to sometimes serious losses and even bankruptcy.
Market depreciation: This means that the market actually reduces the realised value of property assets. Some investors, particularly those who are financially overcommitted, may be forced to sell and lose significant amounts of money
Bad investments: The wrong choice of investment property may be a critical mistake. It is highly important to ensure that your investment is accurately valued and that your position on the market is financially secure
How to Reduce Risk in Property Investment
The best way to reduce risk is to get the experts on your side. You can get a lot of help from professional advisors, particularly financial advisors. It is strongly recommended that you seek guidance before making major financial commitments.
To manage risk and property investment, you need excellent quality information, join a local property investors group and read the many on-line chat rooms where existing experts often post. Strategy particularly in cases where you are assuming debt, must be carefully managed.
Good Money Management to Reduce Risk
If you’re looking at taking on debt to fund property investments, like equity loans, (leveraging), second mortgages, or investment mortgages, iLender can help. We provide expert guidance for our clients. Our network of investment professionals can assist you at all stages of investment, from the planning stage to building your portfolio of investment properties.
Call Us for Any Investment Help You Need
At iLender, we can help you with better mortgage rates and personalised client services to meet your needs. We will make it easier to manage risk efficiently at all stages of your investment. Give us a call now; we are happy to assist. 0800 536 337