Every investment has an element of risk.
The secret is to manage the risks to maximise the results.
Here are 3 Risk Management Strategies from RealRenta to help you do exactly that:
- Manage the interest rate risk
Always ensure that you have a cash buffer or line of credit in the case interest rates increase.
Consider locking in a portion or all, of your loan to fixed interest rates.
Keep rental rates in line with the market, as inflation and house prices rise.
- Manage the market risk
Prices may soften from time to time, however property market crashes in the capital cities are unlikely.
Buying investment grade properties, with a history of outperforming the averages is the best strategy to mitigate any market risk.
Build equity by buying property, that is under its’ intrinsic value (distressed sales etc) and manufacturing equity via renovations.
- Manage your liquidity risk
Liquidity risk refers to how difficult it will be to offload an asset when required to do so.
This can be due to an underperforming asset, or your individual changing financial circumstances.
The best risk management strategy for liquidity is not to invest in properties that are in abundant supply.
Instead, only invest in marketable investment grade properties, in areas where there is a significant number of property turn-over, or what is also referred to as a “liquid market”.
All good things take time. Property investment can be a low risk method of creating wealth.
Maximise your returns by using RealRenta to manage your property and stop handing over your profit to a property manager.
At RealRenta, we make it our business to work with Australia’s premier property developers and, in doing so, are able to help you identify, understand and assess the potential capital growth, rental return and tax benefits of your next investment.
We’re focused on getting you priority access to developments in Australia’s fastest-growing suburbs.
Here are our latest discoveries that savvy investors will love:
https://mailchi.mp/1852d8950e2e/realrenta-property-investment-options
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