Seek first to understand Property in Australia
Admin 714 21 Nov, 2015

Seek first to understand Property in Australia Warren Buffett has said that although he has made his fortune in investing, he detests risk. "Risk comes from not knowing what you're doing," he says. The better you understand what you’re doing, and why you’re doing it, both from a financial and personal perspective, the better investment decision you will make.

Your only failure is the failure to educate yourself.

One of the best ways to ensure that you’re not gambling when investing in property in Australia is to manage the variables. The best way to manage the variables is to invest in your self through education.

Should You Pay Off the mortgage of your property investment early?
Some people believe that the best way to pay off an investment home mortgage is to accelerate payments through bi-weekly programs or sending the bank extra money out of their pay-check each month.

This might be the right thing to do for some people, but most often it is not. What many people don’t realise is that these great intentions can actually put the homeowner at greater risk and, in some cases, be a slower way to eliminate their mortgage payment.

An example of the amplified risk of sending extra payments to the
 bank would be if two neighbouring homeowners hit hard times.

One neighbour has his loan more than halfway paid off and the other has no equity at all (is fully mortgaged).

Which home do you think the bank will seize first?
The bank will seize the home that is closer to being paid off first (because there’s more money in it for them) rather than the home that is fully mortgaged.

This doesn’t seem fair, since the one that has been paying the house off more quickly deserves some credit for that, right? Unfortunately, that’s not how the bank looks at it.

Additionally, people who want to hurry and pay off their homes are also potentially lowering their tax advantages in addition to losing control of their money by putting it into something that is not liquid.

They’re also losing the opportunity to have those dollars working for them just as hard in another property.
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